OECD Releases Text of Pillar 1 Convention on Global Taxing Rights

JAKARTA. The Organization for Economic Co-operation and Development (OECD) through the Inclusive Framework (IF) on Wednesday (11/10), has released the text of the Multilateral Convention (MLC) Pillar 1in the international tax framework.

Pillar 1 contained in the international tax framework regulates the taxing rights of multinational companies' profits to market countries.

The scope of these provisions covers multinational companies that have global business revenue of more than 20 billion Euros. Then, companies that meet the criteria must reallocate more than 25% of their profits, to be distributed to the jurisdictions where their customers or service users are located.

With the release of the MLC, the OECD stated that efforts to implement the provisions stipulated in Pillar 1 are getting closer.

The plan is that the MLC will be presented by OECD Secretary-General Mathias Cormann to the Minister of Finance and Central Bank Governors of G20 member countries this week in Morocco.

According to Cormann, substantively the released MLC draft will provide a basis for countries and jurisdictions to ratify the provisions that will be regulated in Pillar 1.

Cormann admitted that previously there were still differences in views from each country and jurisdiction regarding several matters in Pillar 1, as stated in the footnotes by the jurisdictions involved in resolving these differences. (ASP/KEN)