OECD Multilateral Convention to implement Amount A of Pillar One and the Explanatory Statement released

l OECD Multilateral Convention to implement Amount A of Pillar One and the Explanatory Statement released

Based on the press release from the MOEF, the Task Force on Digital Economy (TFDE) of the OECD/G20 Inclusive Framework (IF), responsible for discussions on Pillar One - addressing the allocation of revenues to market jurisdictions of multinational enterprises (Amount A), released the draft of the Multilateral Convention on Pillar One (MLC) and its Explanatory Statement on October 11, 2023.

The currently released draft of the MLC includes the agreements reached so far by members of the IF concerning Amount A. However, for a few specific items which some countries express dissent on (for example, details on how to calculate estimated taxes to apply the safe harbor rule, scope of tax certainty for issues related to Amount A, etc.), are annotated in footnotes in the MLC.

By releasing the draft of the MLC, the TFDE aims to enhance transparency in the discussions on Pillar One, facilitate utilization for member countries' domestic processes, resolve remaining issues, and prepare the final version of the MLC for signature.

The OECD/G20 IF plans to continue discussions to reach an agreement on the final version of the MLC on Pillar One by the second half of 2023, following the Outcome Statement approved by 138 member countries on July 11, 2023. It is noted that among the 143 countries, five countries (Russia, Belarus, Sri Lanka, Canada, and Pakistan) have refused approval.