Implementation of the international tax reform agreement to ensure multinational enterprises pay a fair share of tax wherever they operate is progressing, according to an OECD report delivered to G20 finance ministers and central bank governors ahead of their recent meeting in Indonesia.

The report includes a new Progress Report on Pillar One, presenting a comprehensive draft of the technical model rules to implement a new taxing right that will allow market jurisdictions to tax profits from some of the largest multinational enterprises (“Pillar One”). This report will now be subject to public consultation through to mid-August. 

The Inclusive Framework will then aim to finalise a new Multilateral Convention by mid-2023, for entry into force in 2024.
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See Announcement

As part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, the OECD is seeking public comments on the Progress Report on Amount A of Pillar One.

The Progress Report on Amount A of Pillar One is a consultation document released by the OECD Secretariat for the purposes of obtaining further input from stakeholders on the technical design of Amount A. The comments provided will assist members of the Inclusive Framework in completing the work on the technical development of Amount A.

Interested parties are invited to send comments on this discussion draft no later than 19 August 2022. 

See Announcement 

Luxembourg and the United Kingdom have signed a new tax treaty.

The new treaty, which will replace the old 1967 treaty, will greatly facilitate trade and investment between the two countries, and contains the latest tax transparency standards from the OECD's BEPS work.

Lucy Frazer, Financial Secretary to the Treasury, stressed: "I was delighted to be able to contribute to strengthening the long-standing partnership between the UK and Luxembourg through the signing of this new tax treaty. Through it, cross-border trade and investment between our two countries will continue to flourish in the future."

​See Release

The Italian Revenue Agency has issued a clarification on the application of the arm's length principle.

Circular No. 16/E of 24 May 2022 states that the relevant arm's length range must be defined on the basis of the OECD Transfer Pricing Guidelines. 

The Circular is available on the tax authority’s website.
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See Circular

Dominican Republic is consulting on draft rules on Mutual Agreement Procedures (MAP) for dispute resolution under the country's tax treaties.

The rules focus on submission of MAP requests.

Comments must be received by 30 June 2022.
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See Draft Rules

The OECD has published public comments received on tax certainty aspects of Amount A under Pillar One.

On May 27, 2022, as part of the ongoing work of the Inclusive Framework on BEPS to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, the OECD invited public comments on tax certainty aspects under Amount A of Pillar One to assist members in further refining and finalising the relevant rules.

The comments are uploaded on the OECD’s website.
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The Finnish Tax Administration has published updated guidance on the Taxation of certain cross-border hybrid arrangements. 

guidance regarding the application of the reverse hybrid mismatch rule that was subsequently introduced with effect from 1 January 2022.

The complete guidance is available on the tax authority’s website in local language.
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OECD has released new transfer pricing profiles for Egypt, Liberia, Saudi Arabia, and Sri Lanka.

These country profiles focus on countries' domestic legislation regarding key transfer pricing principles, including the arm's length principle, transfer pricing methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, transfer pricing documentation, administrative approaches to avoiding and resolving disputes, safe harbours and other implementation measures.

The information contained in these profiles is intended to clearly reflect the current state of countries' legislation and to indicate to what extent their rules follow the OECD Transfer Pricing Guidelines.
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See Update

​Luxembourg has issued an updated Circular on defensive measures in relation to non-cooperative jurisdictions.

The Circular provided guidance on the requirement for taxpayers to declare transactions with related parties in non-cooperative jurisdictions.

The Circular includes guidance on the defensive measure for non-deductibility of interest and royalty payments made to related parties in non-cooperative jurisdictions from 1 March 2021. 

See Circular

The OECD is seeking public comments on two consultation documents relating to tax certainty: a Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A under Pillar One.

A central element of Amount A is an innovative Tax Certainty Framework for Amount A which guarantees certainty for in-scope groups over all aspects of the new rules, including the elimination of double taxation. This eliminates the risk of uncoordinated compliance activity in potentially every jurisdiction where a group has revenues, as well as a complex and time-consuming process to eliminate the resulting double taxation.

Furthermore, a tax certainty process for issues related to Amount A will ensure that in-scope Groups will benefit from dispute prevention and resolution mechanisms to avoid double taxation due to issues related to Amount A (e.g. transfer pricing and business profits disputes), in a mandatory and binding manner.
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Interested parties are invited to send their written comments no later than 10 June 2022.

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The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) entered into force for Bahrain and Romania on June 1, 2022.

With respect to the covered agreements (tax treaties) between Bahrain and the other countries for which the MLI has already entered into force, the MLI is generally effective from 1 January 2023 in respect of withholding taxes and for taxable periods beginning on or after 1 December 2022 in respect of other taxes (six months after entry into force).
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With respect to the covered agreements (tax treaties) between Romania and other countries for which the MLI has already entered into force, Romania took the reservation that the MLI will not be effective until additional internal procedures have been completed for each covered agreement and notification on the completion of the procedures is deposited.

During its meeting on May 18, 2022, the Swiss Federal Council adopted the dispatch on the introduction of the automatic exchange of financial account information (AEOI) with 12 further partner states.

Entry into force is planned for 2023, with the first exchange of data taking place in 2024.

Specifically, the Federal Council intends to exchange financial account information with the following additional partner states for the first time in 2024: Ecuador, Georgia, Jamaica, Jordan, Kenya, Moldova, Montenegro, Morocco, New Caledonia, Thailand, Uganda, and Ukraine.
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See Announcement

China has deposited its instrument of approval for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention), which now covers over 1 820 bilateral tax treaties.

China's instrument of approval also covers Hong Kong (China)'s bilateral tax treaties. The Convention will enter into force on 1 September 2022 for China.
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On 1 June 2022, over 880 treaties concluded among the 76 jurisdictions which have ratified, accepted, or approved the BEPS Convention will have already been modified by the BEPS Convention. Around 940 additional treaties will be modified once the BEPS Convention will have been ratified by all Signatories.

See Announcement

Ireland has launched a public consultation seeking stakeholder views on the implementation of the Pillar Two Minimum Tax Rate proposal in Ireland.

The purpose of the consultation is to seek the views of stakeholders on the transposition of Pillar Two into Irish law.
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The consultation period will run until 22 July 2022.

See Announcement

On May 12, 2022, the South African Revenue Service (SARS) published a comprehensive guidance on dividends tax.

Guidance is included on exemption from dividends tax and relief from double taxation; and withholding of dividends tax, among others.

Comments on the guidance may be sent to policycomments@sars.gov.za.
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See guidance