G20 Finance ministers back G20/OECD to set digital tax by 31 December 2020

Finance ministers and central bank governors from G20 nations met in Riyad (Saudi Arabia) on 22 to 23 February to discuss international digital tax in the context of the challenges arising from the digitalization of the global economy. In a communique released at the end of the meeting, the ministers stressed that countries need to reach political agreement on key elements of a revised tax scheme under the framework of G20/OECD by July 2020 so as to “overcome remaining differences” to reach a consensus on global digital tax on December 2020. They welcomed recent progress made by countries toward reaching agreement on a coordinated update to the tax rules for multinational groups. They endorsed the “unified approach” as the basis for further negotiations on “pillar one” which rules would allocate additional taxing rights over multinational group profit to the countries where a multinational group’s customers or digital users reside. The G20 finance ministers also said they welcomed the Inclusive Framework’s progress note on “pillar two,” which goal is for countries to agree to uniform rules for imposing a minimum tax on multinational groups.

They also welcomed progress made on tax transparency standards implementation and call “all jurisdictions to sign and ratify the Multilateral Convention on Mutual administrative Assistance in Tax Matters”.

The 130+ countries that comprise the “Inclusive Framework on BEPS” approved the unified approach in late January and released a statement describing the approach at that time.