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OECD Invites Comments On Tax Certainty Aspects of Amount A Under Pillar One

Monday 6th June 2022

The OECD has issued two consultation documents relating to tax certainty aspects of Amount A under Pillar One.

A central element of Amount A is a Tax Certainty Framework for Amount A which guarantees certainty for in-scope groups over all aspects of the new rules, including the elimination of double taxation. This is to eliminate the risk of uncoordinated compliance activity in potentially every jurisdiction where a group has revenues, as well as a complex and time-consuming process to eliminate the resulting double taxation.

The Tax Certainty Framework incorporates a number of elements designed to address different potential risks posed by the new rules:

  • A Scope Certainty Review, to provide an out-of-scope Group with certainty that it is not in-scope of rules for Amount A for a Period, removing the risk of unilateral compliance actions.
  • An Advance Certainty Review, to provide certainty over a Group’s methodology for applying specific aspects of the new rules that are specific to Amount A, which will apply for a number of future Periods.
  • A Comprehensive Certainty Review to provide an in-scope Group with binding multilateral certainty over its application of all aspects of the new rules for a Period that has ended, building on the outcomes of any advance certainty applicable for the Period.

A tax certainty process for issues related to Amount A will ensure that in-scope Groups will benefit from dispute prevention and resolution mechanisms to avoid double taxation due to issues related to Amount A (for example transfer pricing and business profits disputes), in a mandatory and binding manner. An elective binding dispute resolution mechanism will be available only for issues related to Amount A for developing economies that are eligible for deferral of their BEPS Action 14 peer review and have no or low levels of MAP disputes.

The two consultation documents: Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A however do not reflect consensus regarding the substance of the documents. Stakeholder input received will be used to assist members of the Inclusive Framework on BEPS in further refining and finalising the relevant rules.

Interested parties are invited to send their written comments by 10 June 2022.

 

For more information on the above, please contact Keith Rushen on 0207 486 2378.

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