OECD | Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors

It is my great pleasure to report to you ahead of your first meeting under the Brazilian G20 Presidency. Tax policy and tax administration efforts can help to move the dial in the fight against extreme poverty and hunger, while addressing rising inequality and closing the funding gaps on the Sustainable Development Goals (SDGs). Thanks to the leadership of the G20, stronger international tax cooperation in recent year has delivered significant additional revenues and other important benefits for governments around the world.

• Since the G20 led global efforts to crack down on bank secrecy in 2009, EUR 126 billion in additional tax revenues have been assessed or collected among the members of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).

• The BEPS Project has successfully addressed various tax planning strategies used by multinational enterprises (MNEs) that exploit gaps and mismatches in tax rules to avoid paying tax. The OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) continues to implement the 15 BEPS Actions to tackle tax avoidance, improve the coherence of international tax rules, ensure a more transparent tax environment and address the tax challenges arising from the digitalisation of the economy.

• The implementation of the Inclusive Framework’s landmark Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy (Two-Pillar Solution), agreed on 8 October 2021, is well advanced. The Pillar Two global minimum tax, which represents the most significant globally coordinated effort to address profit shifting ever agreed, is already being (or will be implemented) by over 35 jurisdictions taking effect in 2024. It will substantially reduce low-taxed profit globally by about 80% (from an estimated 36% of all profit globally to about 7%). Moreover, the Inclusive Framework is now working towards finalising the text of the Multilateral Convention to
Implement Amount A of Pillar One (MLC) by the end of March with a view to holding a signing ceremony by the end of June 2024. Amount A is set to allocate taxing rights on around USD 200 billion profit per year and raise USD 17-32 billion by reallocating taxing rights from investment hubs to market jurisdictions.

Since you last met in October 2023, two new countries have joined the Inclusive Framework, bringing its total membership to 145 countries and jurisdictions1 and three new countries have joined the Global Forum, bringing its total membership to 171 countries and jurisdictions – demonstrating the international community’s ongoing commitment to supporting these bodies as important platforms for international tax cooperation.

You can read the full report here.

Compliments of the OECD.