MHA | BEPS 2.0: A Guide to the Latest Tax Reforms and Regulations
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BEPS 2.0: A Comprehensive Guide Unveiling the Latest Taxation Reforms

Latest developments and insights on the two-pillar international tax framework proposed by the OECD.

BEPS 2.0 is an international tax framework which aims to ensure fairer taxation and sets a global minimum corporate tax rate.

Certain Multinational Enterprises (MNE’s) exploit gaps and mismatches in the tax rules of different countries to avoid paying tax. These tax planning strategies are known as base erosion and profit shifting (BEPS), and can disproportionally effect developing countries. To address these issues, the Organisation for Economic Cooperation and Development (OECD) created a tax framework called BEPS 1.0. Over time, the digitalisation of the global economy has meant MNE’s can access global markets with relative ease, which brings increased risks. To mitigate risks brought about by digitalisation, BEPS 1.0 has been updated, and is now commonly referred to as BEPS 2.0.

BEPS 2.0 consists of two key pillars:

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Pillar One

Pillar One is focused on profit allocation and nexus.

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Pillar Two

Pillar Two is focused on a global minimum corporate tax rate.

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Pillar One, comprising Amount A and Amount B, was originally expected to come into force in 2023, though is now expected in 2024. There is no specific timeline set out only for Amount B though the OECD claims to be working in a timebound manner for achieving this.

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The latest news and updates from the OECD and member jurisdictions impacted by BEPS 2.0.

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