Unified Approval to the New Digital Tax Framework

A broad framework was adopted by OECD/G20 members in July 2021, accepting the two-pillar solution to address tax challenges from digitalization of the global economy. 136 participating countries have agreed upon key parameters.

Pillar One - Creates new nexus rule for reallocation of residual profits - Covers MNEs with global sales above EUR 20 billion and profitability above 10% - 25% of profit before tax in excess of 10% of revenue to be reallocated to markets

Pillar Two - Establishes global minimum tax rate of 15% - Applies to MNEs with consolidated revenue exceeding EUR 750 million - Designed to discourage profit shifting to low-tax jurisdictions