Tax Competition of a Different Flavor at the OECD

Last week the Organisation for Economic Co-operation and Development (OECD) hosted a public consultation on several proposals to rearrange international tax rules. The policies up for discussion include three separate approaches to reallocate taxing rights among countries and two proposals to institute a minimum level of taxation for multinational corporations. In the context of the Base Erosion and Profit Shifting (BEPS) Project Action 1, the OECD has categorized the separate proposals as Pillar 1 (rearranging of taxing rights) and Pillar 2 (minimum tax approach) policies. The Pillar 1 proposals include a rearranging of taxing rights based on: Profits derived from user contributions in a market country Profits attributable to marketing intangibles investments Allocation of taxing rights using a formula including sales, assets, employees, and potentially users The Pillar 2 proposals include stronger base erosion protections including: A global minimum tax approach like the U.S.…

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