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PwC submitted a comment letter on December 3 regarding the OECD Secretariat’s Consultation Document (CD) on the Global Anti-Base Erosion (GloBE) Proposal under Pillar Two.

We note that the CD only covers part of Pillar Two (income inclusion) while mostly omitting equally important elements (the “undertaxed payments” rule, subject to tax rule, or switch-over rule). Which of these elements is the priority rule is critical to understanding and therefore commenting as fully as we would like on the operation of Pillar Two as a whole. The dynamics and effects on business of these rules can, and likely will, be very different. Furthermore, the interaction of Pillars One and Two (the effect of income reallocation under Pillar One on effective tax rates (“ETRs”) under Pillar Two, and vice versa) is not addressed. This interaction is also crucial in its effects on tax certainty, business investment, and the level of disputes, just to name three items.