On July 1, 130 countries of the 139 members of the OECD Inclusive Framework on Base Erosion and Profit Shifting committed to fundamental changes to the international corporate tax system. The 130 countries include the G7 members (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), emerging economies like Brazil, China and India, and jurisdictions like Switzerland, Singapore, Bermuda, and the Cayman Islands. However, Ireland, Hungary, Estonia, Barbados, Kenya, Nigeria, Peru, Sri Lanka, Saint Vincent and the Grenadines did not sign on to the consensus.
Pillar One and Two represent a major overhaul of the international corporate tax system. Note again that the application of Pillar One to the residual profit of 100 corporate groups means that a substantial amount of crossborder income could remain unaffected. Although a lot of political and technical work is needed before the end of
the year, political pressure and an ambitious implementation timeline imply that Pillars One and Two now constitute some of the key tax factors for large MNEs to consider in their scenario planning.