Following the conclusion of a two-day meeting on January 29-30, the OECD/G20 Inclusive Framework on BEPS (the ‘Inclusive Framework’) issued a package of documents that update the state-of-play regarding work on tax challenges arising from the digitalization of the economy, and set forth a revised work program. The Inclusive Framework endorsed the OECD Secretariat’s concept of a ‘Unified Approach’ to Pillar One on profit allocation/nexus rules and committed to achieving agreement within 2020. Whether Pillar One will apply only as a safe harbor will be held for ultimate decision until the key design features have been agreed, as countries’ views strongly differ on this point -- although it is agreed that unilateral measures will need to be withdrawn. A long-awaited public presentation of the OECD’s economic analysis of the two Pillars will be made in February.
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