International
Asia Pacific
EMEA
North America
Latin America
A text of the Multilateral Convention to implement Amount A of Pillar One (MLC) and additional explanatory guidance was released by the OECD on 11 October 2023. The text reflects the consensus achieved so far but has not yet been opened for signature, and changes could still be made as the Inclusive Framework members work out the remaining issues. A Fact Sheet was also issued shortly thereafter, highly summarizing the proposed Amount A regime. Here, we cover the significant provisions, particularly new provisions compared to the July 2022 Progress Report, of the MLC in more detail and consider the implications for potentially in-scope groups.
The issuing of the MLC was a significant step in the ongoing process of bringing the Pillar One rules to fruition. Although there still remain formal objections to some provisions in the MLC by certain jurisdictions, and other jurisdictions have made it clear that there are still some open issues to be resolved from their own perspectives, there appears to be a very high level of agreement to the overall design of the rules, and a significant amount of consensus on individual provisions. However, as the MLC is not final, there is an increasingly high likelihood that the MLC will not be in place by the end of 2023. This will, therefore, lead to significant questions regarding the expiration of the stand-still agreement for jurisdictions not to impose new Digital Services Taxes (DSTs) and whether certain jurisdictions that signed joint statements with the US will extend their commitments to provide credit for historical DSTs against Amount A tax.
Other key takeaways:
Click here to access the full alert
Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.
Are you sure want to delete comment ?
Scan this QR Code to share this content