G20 Finance and Central Bank Governors Meeting - Session 2: Other issues (International Taxation)


Remarks by Angel Gurría

OECD Secretary-General

18 October 2019 - Washington, United States

(as prepared for delivery) 



Ladies and Gentlemen,

I am glad to report progress in addressing the tax challenges of digitalisation. It is now time to finish the job, keeping in mind that when the G20 works collectively on tax issues it delivers big!

The proposal I am bringing to you today seeks to move the ball forward, building on the 2-pillar Programme of Work that you endorsed in June.

On Pillar 1, focused on nexus and profit allocation, the Programme of Work recognised that there were three concurrent approaches that needed to be reconciled. In order to detonate the process, I have tabled a proposal that would allow us to reach an agreement on the architecture by January 2020.

This proposal for what I would call a “Unified Approach” draws on the commonalities of the three approaches put forth by the Inclusive Framework on BEPS. Its key features are the following:

  • It creates a “new nexus” and corresponding rules that would ensure that companies are taxed, even in jurisdictions where they do not have a physical presence.

  • It also establishes a formula to allocate a share of “excess” returns to market jurisdictions, while increasing tax certainty through binding effective dispute resolution mechanisms.

Under Pillar 2, we are also making good progress on the technical parameters, on which we hope to obtain convergence soon. Some agreement has already been reached on its design, such as the fact that the GloBE (global anti-base erosion) proposal will operate as a top-up to an agreed fixed rate of tax that will be set once other key design elements of the proposal are finalised.


So, what does this all mean moving forward?

We need your personal involvement on the more detailed outline of the architecture by January 2020. Ideally, full agreement on the technical parameters of our proposal would be achieved at the June 2020 Inclusive Framework meeting.
This would include specifics such as the portion of profit to be allocated to jurisdictions.

The stakes are high. The counterfactual to an agreed solution would be a further increase in unilateral measures, a cacophony leading to broader trade frictions and a negative impact on an already weakened growth and investment outlook.

Preliminary results from our impact assessment and economic analysis show that revenue would be rightfully shifted to market jurisdictions.
It is mainly investment hubs that lose out. It shows that both developing and developed countries win, especially when the effects of pillar 2 are taken into account.

We are continuing work to provide a more detailed assessment, but for now, the decisions leading to success are in your hands. With your leadership, we can achieve another BEPS-related success - perhaps our biggest achievement yet.

Last, but certainly not least, I want to report further progress on tax transparency and invite you all to celebrate the 10th anniversary of the Global Forum on Transparency and Exchange of Information for Tax Purposes, on 26 November 2019 in Paris.

Close to 50 million bank accounts were exchanged by the end of September 2019 for a total value exceeding EUR 5 Trillion and already close to EUR 100 Billion of additional tax revenues have been identified. AEOI has also led to a decline of 20% to 25% in the bank deposits in international financial centres (IFCs) over the past decade.

Changes on our fight against BEPS are also massive. 25 000 exchanges of previously secret tax rulings
have taken place since 2016, which is  4 000 more since I last reported in June 2019; 80 jurisdictions (up from 62 jurisdictions last year) have engaged in the exchange of Country-by-Country reports (CbCR) on the activities, income and assets of multinational enterprises, which began in June 2018. Since 2015, over 285 regimes have been reviewed and virtually all of the regimes that were identified as harmful have been amended or abolished. At this stage, all treaty shopping hubs have signed the Multilateral Instrument and tax administrations are reporting that they can see meaningful behavioural changes among taxpayers.

Let’s keep demonstrating that effective international co-operation can make the difference. Thank you!




See also:

OECD work with G20

OECD work on Tax


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