On 18 February 2022, the OECD released a new public consultation document with respect to the draft model rules for Amount A. This time, the draft model rules cover the Tax Base Determinations building block which deals with enabling an MNE group in scope of Amount A to determine the taxable profit which will be partially reallocated to so-called market jurisdictions. This document comes only two weeks after the OECD issued its first extensive publication on Amount A covering the two components Nexus and Revenue Sourcing. It should be noted that the latest draft model rules are a work-in-progress and subject to changes. The OECD welcomes comments from the public before 4 March 2022, following which more detailed commentary on a number of technical items is expected to be released.
On 4 February 2022, the OECD published the draft model rules for two of the building blocks of Amount A under Pillar One, namely Nexus and Revenue Sourcing. This is the first extensive publication on Pillar One since the political agreement on the Two-Pillar Solution in the form of the joint statement from the Inclusive Framework dated 8 October 2021. The draft model rules enable an MNE group in scope of Amount A (i.e., global turnover above EUR 20 billion (or local equivalent) and profitability above 10%, subject to some exceptions; hereafter referred to as a “Covered Group”) to determine its so-called market jurisdictions to which part of the Covered Group’s residual profits will be allocated.
On 20 December 2021, the OECD/G20 Inclusive Framework published model legislation regarding the Pillar II global minimum tax regime: the Global Anti-Base Erosion rules.
On 22 December 2021, the European Union Commission published its proposal for a directive to “prevent the misuse of shell companies for tax purposes”. The purpose of the Proposal is to discourage the use and creation of shell companies within the European Union.
On 8 October 2021, 136 member jurisdictions of the OECD’s Inclusive Framework signed up to a revised Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. The Statement confirms a number of issues left outstanding from the previous statement on 1 July. Notably, it confirms the amount of residual profits to be redistributed under Pillar One, the rates of tax under the new Global Minimum Tax regime and subject to tax rule, the calculation of the substance based carve out, and the timing of the implementation of the plan. The Inclusive Framework has been able to reach near unanimous political agreement on the broad architecture of the Two-Pillar solution and will now turn to the technical challenges of agreeing the finer details ahead of publication of implementation instruments.
In brief On 29 March 2021, the Dutch Ministry of Finance published a consultation on legislative changes to the taxation of open limited partnerships (“Open C.V.”) and mutual funds (“fgr”). In addition, the consultation document comprises of policy changes regarding the qualification of foreign legal forms. The consultation period will end on…
Read publication We are pleased to enclose the June issue of Tax News and Developments, a publication of Baker McKenzie’s North America Tax Practice Group. This month’s edition features Proposed Regulations on Deductibility of Certain Fines and Penalties and Related Information Reporting Retirement Relief Provisions Accessible to More Taxpayers and…
Following a recent announcement of the European Commission’s proposal for a three-month deferral of reporting deadlines under the new DAC6 mandatory disclosure regime in the EU and UK, the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (COREPER) has now reached an agreement on a revised proposal which could possibly defer the reporting deadline for six months. On the basis that the draft Directive, once approved, may be adopted at the discretion of each member state, it is imperative that businesses do not delay in preparing to meet their existing compliance obligations should reporting dates not be deferred (or not be deferred in all Member States where they operate).
On July 2nd, 2019, the Dutch government published a legislative proposal on the implementation of the EU Anti Tax Avoidance Directive 2 (“ATAD 2”) in Dutch tax law. The main objective of ATAD 2 is to eliminate hybrid mismatches by neutralizing their tax effects. The proposed legislation is to a…
The Dutch Supreme Court referred questions for a preliminary ruling to the European Court of Justice, asking whether certain elements of the Dutch fiscal unity regime should also be available to Dutch resident companies with a 95% or more EU resident parent, subsidiary or sister company which can not be part of a Dutch fiscal unity due to the geographical restrictions of the fiscal unity regime.