On October 8th, the Organisation for Economic Co-operation and Development (OECD) announced that 136 countries have adopted its two-pillar proposal to reform the taxation of multinational enterprises (MNEs).
Pillar One applies to MNEs with sales in excess of $20bn and profits over 10%. It shifts the taxing rights of the next 25% of profits above the 10% threshold to market jurisdictions, that is, to the country where the goods and services of the MNE in question are sold. The measure is thought to apply only to about 100 MNEs, many of them in the highly profitable digital services sector. Pillar Two introduces a minimum tax of 15% for all MNEs with revenues of more than $750m.