OECD announced a new two-pillar plan towards international tax reforms during the recent virtual G20 Tourism Ministers Meeting on 1st July 2021. This comes after 130 countries and jurisdictions agreed to sign up for a global corporate minimum tax rate proposal that the G-7 presented in June. The two-pillar plan – the outcome of negotiations coordinated by the OECD for much of the last decade – aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits while adding much-needed certainty and stability to the international tax system. The world has taken a big step toward sweeping changes to global taxation as 130 countries endorsed setting a minimum rate for corporations along with rules. This deal would probably come into effect in 2023.
UAE has welcomed the statement issued by the Organization for Economic Cooperation and Development and the G20 (G20/OECD) on the Inclusive Framework on Base Erosion and Profit Shifting. This will enhance the Nation’s efforts to strengthen ties with various world countries regarding financial and economic cooperation. The UAE is one of the 130 member countries that have joined the consensus.
UAE is actively participating in various initiatives and discussions to improve the transparency of the international tax environment and the coherence of the global tax system. The successful implementation of economic substance and transparency rules proves the Nation’s ability to adapt its practices to meet international standards. This remarks a new beginning for the Nation to expand global parallel connections and secure global tax stability.