The Organisation for Economic Cooperation and Development (OECD) continues to observe a steadfast dedication from nations aiming to conclude a comprehensive global tax agreement targeting highly profitable multinational corporations, according to its tax chief. This comes after several months marked by delays and indecision from some major countries. Representatives from nearly 130 countries and territories failed to meet a mid-year deadline to finalize the terms of an international treaty that would reassign taxing rights across borders, primarily affecting large US digital companies, leaving the agreement's fate uncertain. The pact, which is the first part of a two-pillar overhaul of cross-border corporate taxation agreed upon in 2021, seeks to replace unilateral digital services taxes with new rules for distributing taxing rights among companies like Alphabet's Google, Amazon.com, and Apple.
"There is a 100% commitment among members to see this through," OECD tax director Manal Corwin stated during a press briefing. "The urgency is palpable, and achieving something by the end of the year would be a top priority for me," she added. Washington has indicated that India, China, and Australia are still hesitant to comply with US demands regarding alternative methods for calculating transfer pricing. Simultaneously, countries have started to implement the second pillar of the 2021 global tax deal, which stipulates that they must either impose a 15% minimum corporate tax rate or apply a top-up levy on large multinationals that book profits in countries with lower tax rates. As part of this implementation, a first group of 19 countries either signed or committed to sign a treaty on Thursday, enabling developing countries to tax certain intra-company payments that would otherwise be made with minimal or no tax, according to the OECD.
