ETAF welcomes the agreement on a new framework for international tax reform

October 11, 2021

On Friday 8 October, 136 members of the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) reached a final agreement on a new framework for international tax reform. The European Tax Adviser Federation (ETAF) welcomes this step and expects the G20 Finance Ministers to endorse the deal during their meeting in Washington on 13 October, before the approval of the G20 leaders in Rome on 30-31 October.

The framework updates key elements of the century-old international tax system which is no longer fit for purpose in the digitalised 21st century economy. The two-pillar package aims to ensure that large multinationals companies pay tax where they operate and earn profits, regardless of whether firms have a physical presence there.

“This agreement arrives at the right time as governments need to raise necessary revenues to repair their budgets after the Covid-19 pandemic”, reacted ETAF President Philippe Arraou.

“With the agreement on Pillar I, all participating countries which have a national digital levy in place will now have to remove them and commit to the new international rules. Having a unified and global approach will provide much more certainty and stability to the international tax system”, he added.

ETAF also welcomes the fact that Ireland, Estonia, and Hungary decided to join the global deal on Pillar II, which will introduce a global minimum corporate tax rate of 15%. “European unity on this question is crucial if we really want to put an end to the race to the bottom with respect to corporate tax rates”, commented Mr Arraou.

While acknowledging the ambitious timeline proposed for the implementation of Pillar I and Pillar II from 2023 onwards, ETAF stresses that tax practitioners will need some time to adapt to the new rules.

It remains to be seen how the deal will be concretely implemented at EU level. Specific attention will have to be given to the carveouts agreed as they may add more complexity in applying the new system.

Notes to editors
For media enquiries, please contact: Marion Fontana, EU Policy Officer, [email protected], Phone: +32 2 2350 105 | Mobile: +32 471 78 90 64

ETAF is a registered organisation in the EU Transparency Register, with the register identification number 760084520382-92.

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