G20 finance ministers say “unified approach” should be basis for negotiating updated tax rules for multinationals

By Julie Martin, MNE Tax

G20 finance ministers and central bank governors, at their meeting in Riyadh, Saudi Arabia, held February 22–23, said they welcomed recent progress made by countries toward reaching agreement on a coordinated update to the tax rules for multinational groups. The ministers stressed, though, that counties need to reach political agreement on key elements of a revised tax scheme by July 2020 to achieve consensus by their agreed-to deadline of December 31, 2020.

In a communique released after their meeting, the ministers endorsed the “unified approach” as the basis for further negotiations on “pillar one.” The pillar one rules would allocate additional taxing rights over multinational group profit to the countries where a multinational group’s customers or digital users reside. The 130+ countries that comprise the “Inclusive Framework on BEPS” approved the unified approach in late January and released a statement describing the approach at that time.

The G20 finance ministers also said they welcomed the Inclusive Framework’s progress note on “pillar two,” which was also set out in the January statement. The goal of pillar two is for countries to agree to uniform rules for imposing a minimum tax on multinational groups.

“We encourage further progress on both pillars to overcome remaining differences and reaffirm our commitment to reach a consensus-based solution with a final report to be delivered by the end of 2020,” the ministers said in their communique.

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Julie Martin

Founder & Editor at MNE Tax

Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.

Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.

Julie can be reached at [email protected].

@mnetax

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Julie can be reached at [email protected].