Officials from the Organisation for Economic Cooperation and Development (OECD) recently acknowledged that Pillar 1 implementation would not be ready before 2024.
Pillar 1 is part of the historic agreement between 136 OECD members on a two-pillar approach for overhauling international tax rules on a global basis. Implementation was originally envisioned for 2023. Pillar 1 generally seeks to sets up a framework for signatories to tax online sales for certain large multinational enterprises. Its delay could spur more countries to pursue their own digital services taxes in the meantime.
Pillar 1 had been viewed as having a more difficult road to implementation than Pillar 2, which generally seeks to impose a 15% minimum tax on the earnings of certain multinational groups with revenues of 750 million euros or more. The OECD is still pushing for Pillar 2 implementation by 2023, but that is also looking increasingly unlikely. Objections from Poland have stymied agreement on implementation in European Union, and implementation in the U.S. has stalled with the failure of the Build Back Better agenda.
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