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On 18 February 2022, the OECD released draft Model Rules with respect to the Tax Base Determinations under Amount A of Pillar One. Comments to the draft Model rules are due by 4 March 2022.

This is the second in a series of up to thirteen sets of rules that the OECD is expected to release over the coming months, with very short comment periods, as part of a 'rolling consultation'. The first release covered the revenues sourcing and nexus rules, for which we prepared this short overview. It is particularly important to note that the Inclusive Framework has not agreed to these draft rules – rather, for the moment, they represent the work of the OECD Secretariat. They may, therefore, be subject to change, unrelated to the consultation process. Importantly, IF members will not be required to adopt the GloBE rules. The rules will have the status of a common approach and not of a minimum standard.

This alert provides a short overview of the draft Model Rules and some initial observations.