This report reflects on the implications of the evolving

international tax policy landscape for international tax co-

operation, and provides an update on the 2022 Report “Tax Co-
operation for the 21st Century” and the 2023 Progress Report.
The principles of tax co-operation set out in those reports have
become even more important in light of the implementation of the
Global Minimum Tax, which took effect from the beginning of this
year. This report sets out the advances being made in
implementing the vision for co-operation amongst tax
administrations with a specific focus on the Global Minimum Tax.
It also sets out areas of tax co-operation beyond the corporate
tax system looking at recent developments in the exchange of
information between tax administration as well as other
transparency initiatives with respect to taxation of individuals.
Finally, it addresses the implications of these developments in the
international tax system for developing countries with respect to
both direct and indirect taxes as well as the digitalisation of tax
administration.

This report was prepared by the OECD to inform the discussions

at the May 2024 meeting of G7 Finance Ministers and Central
Bank Governors, at the request of the G7 Italian Presidency.
 2024 Progress Report on Tax Co-operation
for the 21st Century

OECD Report for the G7 Finance Ministers and

Central Bank Governors
May 2024, Italy

©PUBE
OECD 2023
 |2

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over
any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city, or area.
This document was prepared by the Organisation for Economic Co-operation and Development (OECD) Centre for
Tax Policy and Administration, to inform the discussions at the May 2024 meeting of G7 Finance Ministers and Central
Bank Governors, at the request of the G7 Italian Presidency. The opinions expressed and arguments employed herein
do not necessarily reflect the official views of the OECD, its member countries or G7 members.
This work is published under the responsibility of the Secretary-General of the OECD.

Please cite this document as:

OECD (2024), 2024 Progress Report on Tax Co-operation for the 21st Century: OECD Report for the G7 Finance Ministers and Central
Bank Governors, OECD Publishing, Paris, https://doi.org/10.1787/24adfedf-en.

Photo credits: Cover © Shutterstock/metamorworks

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at https://www.oecd.org/termsandconditions

© OECD 2024
3|

Foreword

As international tax standards continue to develop, in the area of corporate income tax and beyond, tax
administrations have developed collaborative, digitally enabled and more real time approaches to the
administration of common rules. This increase in international tax co-operation continues to advance in
line with development of multilateral solutions such as those developed as part of the Two Pillar Solution.
A co-operative approach to tax administration has the potential to maximise the benefits from these
multilateral solutions which in turn can contribute to investment and growth.
This OECD report on Tax Co-operation for the 21st Century has been prepared at the request of Italy, as
president of the G7. The report builds on those prepared previously for the G7 in 2022 and 2023. The
principles of tax co-operation set out in those reports have become even more important in light of the
implementation of the Global Minimum Tax, which took effect from the beginning of this year. The Global
Minimum Tax is now in effect in over 30 jurisdictions, and an increasing number of other jurisdictions have
announced their intention to implement the GloBE rules within the next year. The decision of these
jurisdictions to adopt a common set of co-ordinated rules at the same time offers a unique opportunity to
consolidate the work that is being done in fostering and deepening tax cooperation in order to realise the
vision of tax co-operation laid down in the previous G7 reports. Accordingly, at the request of G7
Presidency, this report sets out a vision for co-operation amongst tax administrations under the Global
Minimum Tax as well as looking at recent developments in the exchange of information between tax
administrations and addresses the implications of these developments for developing countries.

© OECD 2024
 |4

Table of contents

Foreword 3
Abbreviations and acronyms 5
Executive summary 6
1 Corporate tax landscape 7
1.1. Introduction 7
1.2. Applying Principles of Tax Co-operation in the administration of the GloBE rules 10
1.3. Binding dispute resolution 13
1.4. Duplicative measures 14
1.5. Conclusion 16

2 Beyond corporate tax 18

2.1. Introduction 18
2.2. Ensuring the availability of information to tax administrations 18
2.3. Conclusion 20

3 Implications for developing countries 21

3.1. Introduction 21
3.2. Developing countries and the Global Minimum Tax 21
3.3. Broader digitalisation challenges for developing countries 24
3.4. Conclusion 26

References 27

© OECD 2024
5|

Abbreviations and acronyms

APA Advance Pricing Agreement

ATAF African Tax Administration Forum
BEPS Base Erosion and Profit Shifting
CARF Crypto-Asset Reporting Framework
CbCR Country-by-Country Reporting
CRS Common Reporting Standard
FTA Forum on Tax Administration
G20 Group of 20
G7 Group of 7
GIR GloBE Information Return
GloBE Global Anti-Base Erosion Rules
ICAP International Compliance Assurance Programme
IMF International Monetary Fund
MAP Mutual Agreement Procedure
MNE Multinational Enterprise
OECD Organisation for Economic Co-operation and Development
PCT Platform for Collaboration on Tax
QCAA Qualified Competent Authority Agreement
UNDP United Nations Development Programme
UPE Ultimate Parent Entity
VAT Value Added Tax
WBG World Bank Group

© OECD 2024
 |6

Executive summary

In 2022 the German G7 Presidency requested a report from the OECD that looked at the significant
changes to the international tax architecture over the last decade, and considered how those changes
might impact on the future of international tax cooperation.
In response to this request, the OECD Secretary-General submitted a report on Tax Co-operation for the
21st Century to the G7 Finance Ministers and Central Bank Governors in May 2022. This Tax Co-operation
Report described how international collaboration in the administration of increasingly co-ordinated
international tax rules could be enhanced, streamlined, and digitally enabled. The Tax Co-operation Report
made a number of observations on the increasing trend towards tax administration being based on real-
time information and compliance by design principles and noted how developing countries could best take
advantage of these advances in the international tax rule design and practice.
In their May 2022 Petersberg Communiqué the G7 Finance Ministers and Central Bank Governors
welcomed the Tax Co-operation Report and asked the OECD to continue its work in supporting the work
in tax co-operation and to report back on further developments. Taking forward this mandate, Japan, as
President of the G7 in 2023, invited the OECD to prepare a follow-up report, outlining progress and new
areas of tax co-operation. The 2023 Progress Report on Tax Co-operation for the 21st Century was
provided to the G7 in May 2023
The 2023 Progress Report examined the ways that the principles set out in the Tax Co-operation Report
were being incorporated by the members of the OECD/G20 Inclusive Framework on BEPS. The focus of
the 2023 Progress Report was on Amount A and the Global Minimum Tax rules. It also showed how the
principles of the Tax Co-operation Report beyond corporate income tax were being translated into action,
such as with technology-based solutions for effectively collecting and using information for personal
income tax purposes. It also noted the work being done in the area of capacity building to ensure
developing countries were able to benefit from the advances in the international tax architecture over the
last decade.
Building on this work, and in light of the implementation of the Global Minimum Tax with effect from the
beginning of 2024, Italy, as President of the G7 in 2024, invited the OECD to prepare a further follow-up
report, to continue to advance the objectives set out in the Tax Co-operation Report with a focus on
implications for the implementation of the Global Minimum Tax.
This Report is divided into three chapters. Chapter 1 sets out the advances being made in implementing
the vision for co-operation amongst tax administrations with a specific focus on the Global Minimum Tax
(Pillar Two of the Two-Pillar Solution). Chapter 2 sets out areas of tax co-operation beyond the corporate
tax system looking at recent developments in the exchange of information between tax administration as
well as other transparency initiatives with respect to taxation of individuals. Finally, Chapter 3 addresses
the implications of these developments in the international tax system for developing countries with respect
to both direct and indirect taxes as well as digitalisation of tax administration.

© OECD 2024
7|

1 Corporate tax landscape

1.1. Introduction

1. The Tax Co-operation for the 21st Century report (“the Tax Co-operation Report”) (OECD, 2022)
noted that one of the opportunities that arises from having common international tax rules is that tax
administrations can work collaboratively to correctly and consistently apply those rules based on common
information and documentation. This collaborative approach gives rise to reduced burdens for both
administrations and greater certainty for taxpayers and, in doing so, can improve the opportunities for
greater cross-border investment. To achieve this common mission, the Tax Co-operation Report set out
seven principles which collectively comprise a vision for a simple, collaborative, and digital administration
of common international tax rules (see Figure 1).
2. These seven principles were set out in a sequence that tracked the various compliance and
administration steps in applying international tax rules: starting with information collection and filing and
moving through the steps undertaken by the tax administration in the assessment of risks through to audit
and the resolution of any disputes. The final principle identified in the Tax Co-operation Report is to identify
opportunities to leverage the insights gained under the previous steps to consider opportunities to simplify
the rules themselves, by removing duplicative requirements. The 2023 Progress Report described how
these principles were particularly relevant to the rules developed as part of the Two Pillar Solution as the
most recent example of a common set of international tax rules.

© OECD 2024
 |8

Box 1: Summary: the seven principles of the Tax Co-operation Report

7. No duplicative 1. One stop shop

requirements filing

2. Fully enabled
6. Early and binding
digital
resolution
communication

5. Coordinated 3. Central project

inquiries and management with
actions to address taxpayer
identified risks involvement

4. Common and
synchronized risk
assessment

Source: OECD

• Facilitating ‘one stop shop filing’ seeks to reduce compliance burdens on taxpayers by both
standardising the information reporting required as well as providing a single filing location,
replacing multiple different and overlapping reporting requirements and filing procedures.
• Enabling ‘fully enabled digital communication’ seeks to phase out paper-based filing systems
towards fully-digital filing and tax compliance procedures in both domestic and international
contexts.
• Ensuring ‘central project management with taxpayer involvement’ takes a project
management approach, supported by a governance framework, so that participating tax
administrations can work with clearly defined and commonly agreed goals and objectives,
working with the taxpayer as an active participant.
• Performing ‘common and synchronised risk assessment’ assists tax administrations to
streamline and coordinate risk assessment and allow taxpayers with an opportunity to co-
ordinate their strategies to address the risk.
• Coordinating ‘inquiries and actions to address identified risks’ seeks to rationalise the follow-
up actions (such as additional information requests) of tax administrations after having decided
to take further actions.
• Considering ‘early and binding resolution’ recognises that the early resolution of disputes
saves both tax administrations and taxpayers resources (including as a result of double taxation
being imposed until the dispute between tax administrations is resolved).
• Ensuring ‘no duplicative requirements’ seeks to limit duplicative rules and measures which
complicate the international tax architecture and increase compliance burdens without adding
to the integrity or efficiency of the tax system.

© OECD 2024
9|

3. The implementation of the Global Minimum Tax is well underway and the rules are already in
force in more than 30 jurisdictions, with many more in different stages of their legislative process. With the
first GloBE Information Returns being due for filing in 2026, jurisdictions are now putting in place the
systems and resources required to administer the new regime. With the application of the UTPR from the
beginning of next year, the Global Minimum Tax is expected to cover almost 90% of in-scope MNE profit.
The implementation of the Global Minimum Tax is an unprecedented change in the international taxation
of MNE Groups, which will be subject to common minimum tax rules, using a common tax base and
minimum effective rate, for the first time. 1 Given that the Global Minimum Tax is now a reality, the focus
now turns to tax administrations and the opportunities for embedding the application of the principles of
the Tax Co-operation Report in the administration of the GloBE rules.
4. The starting point for an MNE in calculating its GloBE tax liability is the information it uses in the
preparation of the group consolidated financial statements. While the standards and systems used in
consolidated financial reporting will vary, all in-scope MNEs face a common compliance challenge in
identifying the relevant data points to be taken from their existing systems and making the necessary
adjustments to bring them into line with the GloBE requirements. As the GloBE rules are being
implemented around the world at the same time, there is now a unique opportunity for MNEs and tax
administrations to work together to develop pragmatic solutions to these challenges that simplify GloBE
compliance and provide certainty for MNEs while ensuring consistent and co-ordinated outcomes under
the GloBE rules. While there may continue to be a discussion on simplifications in Administrative Guidance
or the exploration of further Safe Harbours, there are also practical steps that can be taken at the tax
administration level to deliver simpler compliance solutions while facilitating a more efficient and effective
administration of the rules.
5. As noted in the 2023 Progress Report, some of this work in embedding the principles of tax co-
operation into the administration of the GloBE rules has already begun. As described in Box 2 below, the
first two principles of the Tax Co-operation Report (one stop shop filing and digital communication) have
been incorporated into the information filing and exchange requirements through the development of an
XML Schema based on a common GloBE Information Return (GIR).
Box 2: Principles of the Tax Co-operation Report already embedded into the Global Minimum Tax

One stop shop filing: One stop shop filing builds on two foundations: having standardised filing requirements and using centralised filing
mechanisms.
• Standardised filing requirements
The 2023 Progress Report illustrated how a standardised information return for the application of the GloBE Rules, known as the
GloBE Information Return (‘GIR’), would give effect to the “one stop shop principle”, by ensuring that MNE Groups are subject to the
same reporting requirements in all the jurisdictions where they operate. The GIR was published by the Inclusive Framework on BEPS
in July 2023 [OECD, 2023] and contains the information needed by a tax administration to perform risk assessment and evaluate the
correctness of a taxpayer’s minimum tax liability. The GloBE Information Return (GIR) contains the information on the tax calculations
made by the MNE Group to determine their Top-up Tax liability or to justify the absence of such a liability. The return is divided into two
parts. The first part is a general section that sets out information about the MNE Group as a whole and includes a summary table that
provides a high-level overview of the application of the GloBE Rules in respect of every jurisdiction where the MNE Group is operating.
The second part of the GIR the MNE provides for a standard template where the MNE provides more detailed information on its
effective tax rate and top-up tax calculations for each jurisdiction except for those where the application of safe harbours and
exclusions allow for more limited disclosure.
• Central filing followed by exchange of information
The design of the Global Minimum Tax provides for a single, centralised filing of the GIR. The rules require each Constituent Entity of
the MNE Group to file a GIR with the tax administration of the jurisdiction where it is located (local filing). This local filing obligation,
however, is switched-off when the Ultimate Parent Entity or a Designated Filing Entity files the GIR with their tax administration, and
there is a Qualifying Competent Authority Agreement (QCAA) in effect to automatically exchange the GIR with the other relevant
jurisdictions. This balances the need to ensure all jurisdictions have access to the information they need to administer the minimum tax
owed in their jurisdiction, while minimising administrative burdens where possible. The GIR is designed to operate as a single
comprehensive information return that sets out all the necessary information a tax administration needs to perform an appropriate risk
assessment and to evaluate the correctness of a Constituent Entity (CE)’s Top-up Tax liability in every jurisdiction. However the
agreed rule-order embedded into the design of the GloBE rules means that a jurisdiction that implements the GloBE rules into its
domestic law may not have taxing rights over an MNE in respect of all the jurisdictions where that MNE operates. This means that all
the information on the GIR that is provided by the MNE on a jurisdictional basis may not be relevant to all implementing jurisdictions.

© OECD 2024
 | 10

Accordingly, the GIR incorporates a dissemination approach that limits the provision of the jurisdiction specific information to those
implementing jurisdictions that have taxing rights in respect of those jurisdictions.
To operationalise the central filing and exchange of GIRs, the Inclusive Framework has developed a Multilateral Competent Authority
Agreement that is expected to be finalised and published in the first half of 2024. Interested jurisdictions will then be able to join this
agreement through signature and activate bilateral exchange relationships with those jurisdictions with which they wish to automatically
exchange GIR information, in time for the first filings and exchanges of GIR information in 2026. When the central filing and exchange
of the GIRs becomes operative, the actual information transmission between jurisdictions will be facilitated by the OECD’s Common
Transmission System.

Fully-enabled digital communication: The 2023 Progress Report anticipated the importance of an XML schema that would allow the filing and
exchange of the GIR to take place in a fully digital and streamlined manner facilitated by the OECD’s Common Transmission System. The Inclusive
Framework on BEPS has been developing a dedicated XML schema and User Guide that is expected to be finalised and published in mid-2024.
The paperless filing of the GIR will reduce the compliance burden on MNE Groups and streamline the identification of omissions and clerical
mistakes through automated validation checks. Having the information in digital form, in turn, will allow tax authorities to leverage analytics
software and risk assessment technology.

6. Building on this initial work, this Chapter focusses on the opportunities for implementing the other
principles of the Tax Co-operation Report with a focus on systems based and collaborative approaches to
risk assessment and audit (principles 3-5) and options for dispute resolution (principle 6) and the removal
of duplicative requirements (principle 7).

1.2. Applying Principles of Tax Co-operation in the administration of the GloBE

rules

7. As noted in the section above, the Inclusive Framework has already developed a standardised
GloBE Information Return (GIR) which MNEs will use to provide the information on its GloBE calculations
for each jurisdiction. This GIR may be filed centrally and the relevant information on the GIR exchanged
with other implementing jurisdictions in accordance with an agreed dissemination approach, ensuring that
each jurisdiction gets the information it needs to perform an appropriate risk assessment and to evaluate
the correctness of an MNE’s Top-up Tax liability in that jurisdiction.
8. Having a standard information template in the GIR, based on common rule design, and exchanging
information under the Convention on Mutual Administrative Assistance in Tax Matters in a shared digital
format (XML schema) as set out under a Multilateral Competent Authority Agreement provides the
foundation for realising the vision of common and coordinated administration of the rules. Building on this
foundation, tax administrations could explore how to adapt their existing experience in the area of tax
control frameworks to the new challenges raised by the Global Minimum Tax and consider the development
of common risk assessment filters that could improve the efficiency, transparency, and integrity of GloBE
outcomes. Those approaches, which are not mutually exclusive, are discussed in turn.

Exploring tax control frameworks and systems-based approaches

9. In 2016 the Forum on Tax Administration issued a report on Tax Control Frameworks and their
role in Co-operative Compliance (OECD, 2016). That Report concluded that when an MNE participating
in a cooperative compliance programme has an effective and robust tax control framework in place this
can significantly reduce the need for reviews and audits of the MNE’s tax returns. This is because the tax
administration can rely on the information on the return and any uncertain or other problematic tax positions
taken in that return will be identified through the tax control framework and brought to its attention under
the cooperative compliance programme.
10. A similar approach in respect of a tax control framework could be applied in the context of the
global minimum tax. Under the GloBE rules, MNEs are required to populate the GIR with data which will
be sourced from their internal reporting systems, including the systems used to prepare the consolidated

© OECD 2024
11 |

financial statements for the MNE Group. While some of the data points will be new and many of the
adjustments required to comply with the GloBE Rules will be manual, it is generally expected that an MNE
will collect and process this information centrally, in line with its current consolidation processes and to
ensure consistent outcomes under the GloBE rules in all the jurisdictions it operates. In cases where the
MNE Group relies upon a standardised reporting system and process to populate elements of its GloBE
Information Return with respect to multiple jurisdictions, a systems-based risk assessment on the system
and process used for one jurisdiction can be expected to be substantially relevant to the risk assessment
undertaken for another jurisdiction that uses the same systems and process. For example, if an MNE group
used the same internal system to calculate its substance-based income exclusion in all the jurisdictions
where it operates, then a systems-based risk assessment could provide significant efficiency benefits for
both the tax administrations and the taxpayer in calculating the effect of the substance-based carve-out.
11. If the reporting system and process is brought within a tax control framework that allows the tax
administration to rely on the underlying data and adjustments that have been made, an overall systems
approach could then potentially be appropriate to verify the correctness of the GIR for every jurisdiction
where the same system is used. To the extent the GloBE calculations can be converted into an explicit
standardised set of procedures to extract and adjust the underlying accounting data, then auditing the
procedure and reviewing the governance framework for the manual interventions could substantially
reduce the need for reviewing the data on the GIR itself.
12. Taking this one step further, if the MNE Group applies the same set of procedures in each
jurisdiction then one core process audit may suffice in respect of the GloBE calculations in each jurisdiction
and for all tax administrations involved in the application of the GloBE Rules in respect of the same MNE
(or, indeed, other MNEs that use the same process).
13. Several practical and design issues would need to be considered for this vision to be achieved.
These include consistency in the implementation and administration of the rules (which is tested through
the Peer Review process), guidance on the development of a tax control framework for GloBE and ensuring
that tax administrations have the relevant technical skills (including experts not only in the underlying
substantive tax and accounting rules, but also in systems, data management and programming to apply a
systems audit of an algorithm), and a process for allowing taxpayers to participate in the design of the
systems based audit approach.

Coordinated risk assessment and inquiries

14. Whereas the preceding section dealt with ways tax administrations can have confidence in using
a systems approach as outlined in a tax control framework, this section focusses on the opportunities for
greater standardisation in the approaches tax administrations might take to compliance activity with respect
to the information filed by the taxpayer, especially in the GIR.
15. The Global Minimum Tax rules have been designed to be as mechanical as possible, drawing on
existing common accounting rules and statements, and using formulaic approaches where appropriate.
However, compliance with the rules will still require elements of judgement, and where tax administrations
may need to further analyse compliance to address possible risks.
16. The coordinated rule order and safe harbours under the Global Minimum Tax means that in many
cases, MNE Groups will only deal with a limited number of jurisdictions’ tax administrations with respect to
the application of the rules to the profits located in a jurisdiction. This structure significantly reduces the
extent to which disputes are likely to arise. Nevertheless, collaborative processes for risk assessment and
inquiries can improve the efficiency and efficacy of the assessment (especially compared to the alternative
under which uncoordinated audits lead to disputes with taxpayers or other jurisdictions) and provide
comfort that tax administrations are applying the rules consistently to ensure a level playing field for both
Inclusive Framework members and MNEs.

© OECD 2024
 | 12

17. Further work could be done to identify the potential synergies from developing common and co-
ordinated approaches to risk assessment and audit of the GloBE rules. Guidance could be developed to
support tax administrations in identifying, from the GIR or other available data, fact patterns and scenarios
that could indicate that a risk of non-compliance with the Global Minimum Tax is present, or alternatively
is not present. This would allow tax administration resources to focus on taxpayers where agreed risk
indicators are present and de-select other taxpayers from further enquiries. Where risk indicators are
present, this guidance could also include common approaches to determine whether an adjustment is
required, such as common follow-up questions and additional sources of data that could be required.
18. This work could build on work such as the Country-by-Country Reporting Handbook on Effective
Risk Assessment, and Transfer Pricing Tax Risk Overviews (TROves) developed as part of the FTA
Comparative Risk Assessment (CoRA) initiative. This work has brought together the experience of a wide
range of tax administrations to compile guidance on specific indicators and fact patterns that are regarded
as high risk, and guidance on the data sources used to detect those risks. By itself, similar guidance could
benefit tax administrations and taxpayers by standardising the approaches taken to risk assess and audit
a MNE’s application of the Global Minimum Tax.
19. When looking at opportunities to develop a common approach to risk assessment, jurisdictions
may also draw on their experiences from multilateral risk assessment through processes such as the
International Compliance Assurance Programme (ICAP, see further below). In ICAP tax administrations
work together to risk assess a Group using common documentation, with coordinated questions submitted
to the Group by a single tax administration (the lead tax administration). If a Group is found not to be low
risk and further enquiries are needed, this could be further coordinated using agreed guidance to direct
those enquiries. Further work could consider these different approaches and how they could work within
the context of the Global Minimum Tax.
Summary of the International Compliance Assurance Programme (ICAP)

ICAP is a voluntary programme for a multilateral coordinated risk assessment of an MNE’s key international tax risks, with 23 tax administrations
currently participating. To date, ICAP has focused on five core areas of international tax risk (tangible goods, intangibles, services, financing
transactions, and permanent establishments), however the flexibility of ICAP enables it to extend to any international tax risk to which the
participating tax administration are party. ICAP offers practical experience in managing joint risk assessment processes between multiple tax
administrations and a taxpayer. For example, ICAP allows for centralised project management with substantial taxpayer involvement. Furthermore,
ICAP also seeks to maximise the extent to which the tax administrations rely upon common documentation packages and communicate with the
taxpayer in a coordinated fashion through a single contact point (a lead tax administration). Both of these mechanisms facilitate an efficient
approach to risk assessment which allows both tax administrators and taxpayers to focus on areas of risk and to limit the compliance and
administration resources dedicated to low-risk issues.

ICAP involves three distinct stages:

• Stage 1, the Selection stage, involves the taxpayer submitting certain documents that already exist within the business to the tax
administration in the jurisdiction in which they are headquartered, during which a decision is made between the taxpayer and tax
administrations as to the scope of the risk assessment and the final list of participating tax administrations.
• In Stage 2, the Risk Assessment stage, the taxpayer submits some further documentation to the covered tax administrations, and each
tax administration conducts an independent risk assessment, benefiting from the availability of harmonious documentation and
coordinated communication with the taxpayer, through the lead tax administration. Typically, there will be at least one multilateral
meeting with all tax administrations and the taxpayer.
• In Stage 3, the Outcomes stage, each tax administration provides an outcome letter to the taxpayer, setting out the transactions which
were deemed to be low risk, and a statement that the tax administration may not envision dedicating any further resources to the low-
risk transactions for the covered periods, and potentially a roll forward period. The outcome letter contains all other relevant facts and
caveats concerning the risk assessment.

ICAP is not a substitute for other compliance interventions, such as APAs and audit. Rather, the use of ICAP in conjunction with other tax certainty
tools to cover a taxpayer’s full suite of transactions is designed to achieve greater resource efficiency and ensure that each programme is used for
the transactions for which it is most appropriate.

© OECD 2024
13 |

1.3. Binding dispute resolution

20. The GloBE rules follow an agreed rule order based on a top-down approach that is intended to
limit the need for co-ordination among tax administrations when applying the rules. In many cases, this
means that the GloBE rules will only be administered by a limited number of tax administrations with
respect to profits booked in a jurisdiction. Nevertheless, there could be situations where the MNE is subject
to the Global Minimum Tax in more than one jurisdiction in respect of the same low-tax outcome. In such
circumstances, there is a risk that different tax authorities may take a different approach to the calculation
of the Global Minimum Tax in respect of the same low tax jurisdiction the MNE Group. This could create
uncertainties in applying and administrating the Global Minimum Tax as illustrated in the example set out
in box below.
Box 3: Example of overlapping Global Minimum Taxes

It is possible that two intermediate parent entities are subject to overlapping taxes with respect to the same low-tax subsidiary. The GloBE Rules
generally apply the Income Inclusion Rule at the level of the Ultimate Parent Entity of the MNE Group. In such case, only a single jurisdiction will
apply the IIR with respect to low-taxed entities. However, if the UPE Jurisdiction does not have an IIR, the GloBE Rules will apply the IIR to any
intermediate parent entities. If the MNE Group had holding companies located in two different jurisdictions both of which had adopted the IIR, then
two jurisdictions could apply the IIR with respect to the same low-taxed entity.

As long as the two Intermediate Parent Entity Jurisdictions apply the GloBE Rules consistently, there will be no double taxation or double non-
taxation with respect to Low Tax Co. Each jurisdiction would apply the IIR with respect to the Ownership Interest that its Constituent Entity held in
Low Tax Co. However, if the two Intermediate Parent Entity jurisdictions took a different view on the meaning of Ownership Interest, it is possible
that collectively IPE1 and IPE2 were subject to either more than (double taxation) or less than (double non-taxation) 100% of the Global Minimum
Top-up Tax amount referable to Low Tax Co.

21. Inconsistency in the application of the agreed minimum tax rules has the potential to create
uncertainty for businesses (e.g., with respect to their filing positions) and could result in double or under
taxation from the application of the Global Minimum Tax rules in those two (or more) jurisdictions. To
ensure that the Global Minimum Tax rules are applied in a consistent and coordinated manner and to
ensure consistent outcomes for MNE Groups as envisaged, such issues should be resolved in a
transparent, efficient, and fair manner when they arise.
22. There are several elements to be considered in the design of a dispute resolution process for the
Global Minimum Tax.
a. Scope –A dispute resolution mechanism would need to clearly define the circumstances when
an inconsistency in the application of the rules gave rise to a dispute that was eligible to be
brought within the dispute resolution procedure. There may be circumstances in which a
difference in interpretation would not result in a dispute within the scope of the dispute
resolution process. Different types of disputes may also require different procedures.
b. Procedure – When considering the design of a dispute resolution mechanism for GloBE it will
be necessary to develop a procedure for resolving the dispute (or potential dispute) on an

© OECD 2024
 | 14

effective and timely basis. Questions arise as to how, who and when can a dispute resolution
procedure be initiated, which tax administrations can be involved, the authority of the tax
administrations to resolve the dispute (and on what legal basis), the outcome of a dispute
resolution procedure, the implementation of the outcome, and in some cases the possibility of
arbitration. The process would also need to address the interaction between the proposed
dispute resolution mechanism and domestic law, including any additional remedies available
to taxpayers.
c. Implementation – As indicated above, a dispute resolution mechanism requires a legal basis.
Conceptually, this could be based on one or more of a multilateral instrument, a model bilateral
instrument or, where feasible, through domestic law based on common template. Many
external stakeholders have voiced support for a multilateral instrument on the basis that it
would provide greater legal certainty.

1.4. Duplicative measures

23. The final principle of the vision for Tax Cooperation for the 21st Century with respect to corporate
income tax contemplates that there could be an opportunity to eliminate duplicative rules and measures
which are targeted at issues already addressed by other measures in the international tax system. The
removal of duplicative measures is intended to reduce compliance burdens on both taxpayers and tax
administrations and has the potential to remove tax obstacles for investment as well as create opportunities
to focus on supporting economic growth.
24. The adoption of the Global Minimum Tax offers an opportunity for revisiting rules that may target
similar risks and to consider their expected impact in light of the introduction of GloBE. The Global Minimum
Tax is expected to reduce profit shifting and tax competition. At the same time, many jurisdictions have
existing measures either stemming from the BEPS Action Plan or their own domestically developed rules
to address similar cross-border concerns. Some of these measures may become partially duplicative as
the Global Minimum Tax addresses the relevant policy concerns which motivated the adoption of these
measures in the first place. The relevant set of measures that countries might have in place include both
substantive and reporting rules. A re-evaluation of the corporate tax system against the backdrop of the
implementation of the Global Minimum Tax and new policies for growth would consider whether there is
scope for streamlining existing duplicative rules that target the same policy concerns.
25. Each jurisdiction will have different rules and may be affected differently by the Global Minimum
Tax. Areas that could benefit from further exploration could include aspects of the anti-hybrid rules. The
anti-hybrid rules were developed under BEPS Action 2 and were designed to target tax avoidance
structures that exploit arbitrage opportunities between tax rules in different jurisdictions. Certain aspects
of the anti-hybrid rules might overlap with the operation of the Global Minimum Tax. An example, in respect
of reverse-hybrids, is set out in the box below. Where both the anti-hybrids rule and the Global Minimum
Tax rule apply, questions may arise as to the intended interaction and the compliance burden associated
with the need to neutralise such hybrids while also applying the GloBE Rules in both jurisdictions that are
implicated in the hybrid transaction. However, there are also differences in the design of the hybrid and
GloBE rules, such as the types of taxpayers to which they apply, the application of nominal tax rates as
opposed to effective tax rates, a focus on specific transactions rather than pools of profit, and different
mechanisms aimed to protect the rights of a source jurisdiction. Such issues may require further analysis
to consider the extent of duplication and overlap in both policy and practice. Other rules specifically
designed to target avoidance behaviour could also be seen as having some overlap with the Global
Minimum Tax and may warrant further consideration.

© OECD 2024
15 |

Box 4: Example – Reverse Hybrid Rule Example

The BEPS Action 2 Report contained a ‘Reverse Hybrid Rule’ which would prevent a double non-taxation outcome arising from a reverse hybrid
entity. The rule would apply where income was taxable neither in the jurisdiction where an entity was established, nor in the hands of the investor.
In such cases, absent the Reverse Hybrid Rule, there could be a ‘deduction/non-inclusion’ outcome such that the income was not taxed anywhere.
The Reverse Hybrid Rule would ‘neutralise’ the hybrid mismatch by denying a deduction to an entity making a payment (the payor) to the reverse
hybrid entity. This would give rise to additional taxation in the payor jurisdiction (at the relevant statutory rate) and prevent a double non-taxation
outcome with respect to the income.

In the above example, the 100 payment from Payor Co to Reverse Hybrid Co is not included in the taxable income of Parent Co or Reverse Hybrid
Co. Accordingly, Jurisdiction A would apply the Reverse Hybrid Rule to deny Payor Co the 100 deduction for the payment to Reverse Hybrid Co. If
Jurisdiction A had a tax rate of 20%, this would produce an additional tax of 20 for Payor Co.

Under the Global Minimum Tax, all income is subject to the minimum tax even if it is not taxed under any jurisdiction’s domestic tax regime. All
income is allocated to a Constituent Entity and each Constituent Entity is allocated to a jurisdiction (or is considered a Stateless Entity). The
multinational is subject to at least 15% minimum tax in each jurisdiction in which it operates and at least 15% minimum tax is also applied to
Stateless Entities. As a result, the relevant income will be subject to at least 15% tax even if it is not recognised in the taxable income of any
jurisdiction under the domestic income tax applicable in those jurisdictions. Applied to the above example, a minimum 15% tax would be applied
with respect to the MNE Group’s operations in Jurisdiction B. Accordingly, there may be up to 15 in additional Top-up Tax payable with respect to
Jurisdiction B under the Global Minimum Tax.

The Global Minimum Tax ensures that payments to reverse hybrid entities will be taxed, even in the absence of the Reverse Hybrid Rule.
However, the rule only applies with respect to in-scope MNE Groups. The Reverse Hybrid Rule also applies to multinationals which are out of
scope for the Global Minimum Tax. Furthermore, the outcomes of the two set of rules are not identical. The Global Minimum Tax ensures a tax of
at least 15% while the Reverse Hybrid Rule would impose additional tax at the rate of the payor jurisdiction. However, despite these differences,
both the Reverse Hybrid Rule and the Global Minimum Tax may have a similar practical effect in significantly reducing the use of reverse hybrid
entities to as a tax avoidance strategy.

Consideration could be given as to the interaction between the Reverse Hybrid Rule and the Global Minimum Tax and whether any amendments
or clarifications could be required. For example, the Reverse Hybrid Rule applies only where there is a ‘deduction/non-inclusion outcome’. Further
consideration could be given as to the appropriate test for a taxable ‘inclusion’ under the Reverse Hybrid Rule in light of the Global Minimum Tax.

26. When looking at the existing international tax framework further thought could be given to the work
of the Forum for Harmful Tax Practices and its interaction with the implementation of the Global Minimum
Tax. The Forum for Harmful Tax Practices reviews corporate tax regimes which attract profits to the
jurisdiction by offering preferential tax treatment that results in low taxation outcomes to ensure they are
not harmful in accordance with the BEPS Action 5 Minimum Standard. For in-scope MNEs, such
preferential tax regimes may no longer be effective in producing below-minimum tax outcomes for the
jurisdiction as a whole. As a result, consideration is being given as to whether adjustments to the scope of
work of the FHTP are to be made in light of the implementation of the Global Minimum Tax.
27. Similarly, the Inclusive Framework could address possible duplicative reporting requirements, or
look to streamline overlapping reporting requirements. Mandatory reporting regimes, which require
taxpayers to disclose certain information with respect to potentially aggressive or abusive tax planning
schemes, may also offer a further opportunity for re-evaluation. These disclosure regimes were introduced
to provide information to tax administrations which can be used for risk assessment and the consideration

© OECD 2024
 | 16

of potential avoidance behaviour. Domestic mandatory disclosure rules among jurisdictions that introduced
them vary especially with respect to the extent of the hallmarks used. In those jurisdictions that use a wide
spectrum of hallmarks that pertain to specific transaction, some of these hallmarks might eventually prove
to be obsolete as transactions resulting in tax benefits would no longer be undertaken after a widespread
implementation of the Global Minimum Tax. For example, hallmarks that require disclosure of payments
to certain low tax jurisdictions may become unnecessary, or the scope of such rules could be revised in
light of the Global Minimum Tax to target different outcomes. In other words, where a tax risk has been
effectively addressed by a substantive change to the tax rules, then rules requiring disclosure of certain
transactions may be an unnecessary cost for both taxpayers and tax administrations. Accordingly, certain
aspects of the scope of mandatory disclosure rules could be revisited as part of a revaluation of a
jurisdiction’s tax system in light of the Global Minimum Tax.
28. A few jurisdictions are already taking steps towards revaluating their own domestic corporate tax
system and measures in place. For example, the United Kingdom has announced the repeal of its ‘Offshore
Receipts in Intangible Property’ (ORIP) regime (see box below). Furthermore, Italy has revised its
Controlled Foreign Company rules as part of the introduction of the Global Minimum Tax and Germany
has lowered its trigger rate for the application of its CFC rules.

Box 5: Example – Removal of the ‘ORIP’ regime in the United Kingdom

Prior to the Global Minimum Tax, the United Kingdom had a regime to address ‘Offshore Receipts in respect of Intangible Property’ (ORIP). The
regime had the policy objective of imposing tax on multinational groups that generated significant income from intangible property through UK sales
but had arrangements in place such that the income was received in offshore jurisdictions where it was taxed at low effective rates or not at all. The
measure was stated to have a policy objective of reducing opportunities for large multinationals to gain an unfair competitive advantage by holding
their IP in low tax offshore jurisdictions.

In 2023, the UK government announced the repeal of the ORIP regime with effect from 31 December 2024 alongside the introduction of the Global
Minimum Tax Undertaxed Profits Rule (UTPR) which was expected to more comprehensively discourage the multinational tax-planning
arrangements that the ORIP regime sought to counter.

1.5. Conclusion

29. The first implementations of the GloBE Model Rules came into force at the beginning of 2024. The
period before the first GloBE Information Returns are due in mid-2026 offers a unique opportunity to
consider implementation of the remaining principles of the Tax Co-operation Report into an effective tax
administration framework for the Global Minimum Tax. Work on these principles could involve:
a. working collaboratively with taxpayers through cooperative compliance programmes to
develop tax control frameworks which would allow tax administrations to explore a systems-
based risk assessment for GloBE compliance;
b. taking advantage of a common set of rules to develop a coordinated approach to risk
assessment based on common risk filters that will improve administrative efficiency,
effectiveness and transparency;
c. exploring a dispute resolution mechanism to provide tax certainty to taxpayers and
administrations.
Further work is needed with respect to each of these aspects drawing upon tax administrations’
experiences with cooperative compliance, tax control frameworks, collaborative risk assessment under
programmes such as ICAP, and existing international dispute resolution and prevention process. While
any insights from this prior work will need to be adapted to the new and different context, such insights will
be valuable in applying the principles of the Tax Cooperation Report to the Global Minimum Tax.

© OECD 2024
17 |

30. Finally, further consideration should be given as to the interaction between the Global Minimum
Tax and existing tax measures which are targeting BEPS activities. Amendments to such measures could
be considered to ensure consistency, increase efficiency, and further support economic growth.

Potential areas of consideration for the future

Continue work to consider the vision set out in the Tax Co-operation Report within the administrative framework applicable to
the Two-Pillar Solution, and more broadly better incorporate its goals into the administration of all multilaterally agreed common
tax rules.
Explore possibilities for tax administrations to collaborate through the Forum of Tax Administration to explore how the principles
of cooperative compliance and coordinated risk assessment can be incorporated into the administration of the Global Minimum
Tax.
Continue further work on mechanisms for resolving disputes in connection with the Global Minimum Tax, including through the
development of a multilateral convention, to maximise consistency and certainty and minimise costs.
Explore the interaction between the Global Minimum Tax rules and other BEPS measures, including whether there are any
duplicative requirements which may be able to be modified or eliminated in light of jurisdictions’ implementation of the
introduction of the GloBE Model Rules.

© OECD 2024
 | 18

2 Beyond corporate tax

2.1. Introduction

31. The Tax Co-operation Report considered changes in the economy, such as the increasing mobility
of capital and labour, and how that drove greater international tax cooperation on exchange of information.
It also looked at the ways that exchange of information architecture could evolve by leveraging advances
in technology which could, for example, facilitate compliance by design and reduced burdens on taxpayers.
Chapter 2 of that Report looked at recent developments in relation to the exchange of information with
respect to individuals. It also described the emerging trends, evolving from periodic, bulk, backward-looking
access to information towards more targeted, direct, and real-time access to data.
32. The 2023 Progress Report noted advances being made in accessing relevant information,
including the Crypto-Asset Reporting Framework (CARF) and the effective use of information from the
Automatic Exchange of Financial Account Information including the move to more inter-connected, real
time information flows, drawing on the principles in the Forum on Tax Administration’s Tax Administration
3.0. This chapter provides updates on the most recent progress being made in these areas.

2.2. Ensuring the availability of information to tax administrations

33. Since the 2023 Progress Report, efforts have continued to ensure the availability of high-quality
information to tax administrations, through the automatic exchange of information.

2.2.1. Finalisation and implementation of the Crypto-Asset Reporting Framework (CARF)

34. The 2023 Progress Report noted the efforts underway to address the risks that emerge from a
lack of transparency on Crypto-Assets. Since then, the Global Forum on Transparency and Exchange of
Information for Tax Purposes has continued its work to ensure the widespread implementation of the CARF
by relevant jurisdictions. This includes the development of a framework to identify relevant jurisdictions as
well as an appropriate and coordinated timeline, where the ambition of a significant number of jurisdictions
to start exchanges in 2027 was evident (while noting that the need to explore the provision of some limited
flexibility around this date was also identified). Significant emphasis has also been placed on raising
awareness and disseminating information concerning the CARF to interested jurisdictions by hosting
educational events for jurisdictions and sharing guidance. The next steps are to finalise the Global Forum’s
commitment process in relation to the CARF by the Global Forum’s 2024 Plenary, at which point the next
steps will also be outlined to deliver CARF exchanges. This will provide tax administrations with a new
detailed and rich information source with respect to an area that currently has very limited transparency
for them to utilise and ensure that the correct taxes are paid.

© OECD 2024
19 |

2.2.2. Ensuring effective implementation of the Common Reporting Standard (CRS)

35. Efforts continue to ensure that the information being exchanged pursuant to the CRS is of high
quality, and able to be used effectively to detect and address offshore tax evasion. Last year, the Global
Forum launched its second round of effectiveness reviews in relation to the CRS. After having reviewed
the completeness of the CRS legal frameworks and having completed initial desk-based reviews as to the
effectiveness of the implementation of the CRS in practice, the Global Forum is now carrying out deeper
peer reviews to ensure that the required information is being exchanged properly and that it is complete
and accurate. This second round of CRS effectiveness peer reviews is due to be completed and published
in 2025, for all 99 jurisdictions that committed to commence exchanges in 2017 or 2018. Reviews of the
jurisdictions committed to commence exchanges from later years will follow. These peer reviews should
ensure that Financial Institutions are properly implementing the CRS and that tax administrations receive
high quality information under the CRS for them to utilise to ensure that the correct taxes are paid.

2.2.3. Beneficial ownership

36. While these developments will ensure that the tax transparency architecture for financial assets
remains effective and fit for purpose, work has also started on possible approaches for enhancing tax
transparency with respect to income held through non-financial assets, in particular real estate. In this
connection, the report delivered by the OECD to the G20 Finance Ministers in July 2023 sets out possible
structural solutions that step away from annual exchange of information between tax authorities and build
on the trend of digitalising ownership registers to move to a model whereby tax authorities proceed with
the real-time or fast sharing of information in data repositories, including real estate registers and beneficial
owner registers of legal entities and legal arrangements.
37. In this respect, work is now advancing to collect information from jurisdictions on their current
practices related to the collection and exchange of information on foreign-held real estate, which will be
used to design a roadmap on how enhanced transparency on foreign-held real estate can be delivered by
interested jurisdictions on an incremental basis. The combination of greater visibility on ownership of, and
income derived from real estate, together with the advances in exchange on financial accounts and crypto-
assets, provides opportunities for more effective and efficient taxation of income, as more information will
be directly available to tax administrations, rather than pursuing an after-the-fact, time consuming audit or
investigation in many cases.

2.2.4. Real time information flows

38. The Forum on Tax Administration has also recognised the value of moving towards more real-time
models of information flows. The integrated data vision explored in the OECD Forum on Tax Administration
3.0 report (OECD, 2020) is that by designing the data collection, reporting and exchange elements into the
processes of taxpayers and businesses, with the data moving automatically through machine-to-machine
based processes, including potentially in real-time, tax compliance can increasingly be designed in. Taking
this forward, in October 2023, the FTA Plenary in Singapore approved a series of collaborative projects
between tax administration and stakeholders from the business and academic communities to help
progress the Tax Administration 3.0 vision. Two of these projects focus on the practical considerations
raised by making data exchange between tax administrations or between tax administrations and business
more automated and closer to taxable events. Two further projects are considering the strategic issues
raised by digital transformation and how Artificial Intelligence can be used ethically by tax administrations.

© OECD 2024
 | 20

2.3. Conclusion

39. Progress continues to be made on advancing the availability of information for tax administrations,
and to progress toward real-time, technology-based solutions for greater and faster information exchange.
40. The OECD stands ready to advance work on additional international tax cooperation measures,
including on continued exchange of information.

Potential areas of consideration for the future

Beyond corporate income tax:

Continue to advance the Forum on Tax Administration’s Tax Administration 3.0, by sharing best practice and technical
expertise on real-time information exchange.
Support the work to explore enhanced transparency on real estate and beneficial ownership.

© OECD 2024
21 |

3 Implications for developing

countries

3.1. Introduction

41. The importance of tax co-operation for developing countries remains at the forefront of the
international tax agenda, and a priority for the G7 (see, for example, OECD, 2023). The Tax Co-operation
Report emphasised the importance of efficient and effective tax administration for domestic resource
mobilisation. It noted the role of new tools such as the Two Pillar Solution, VAT, and information exchange
as part of the policy changes that are relevant to developing countries and emphasised the importance of
capacity building to ensure full participation by developing countries in those benefits. In particular, the
Global Minimum Tax offers opportunities for domestic resource mobilisation, and for implementing
jurisdictions to rely on a common compliance framework. As such, work is ongoing to assist with
implementation of the Global Minimum Tax, and in other areas.

3.2. Developing countries and the Global Minimum Tax

42. The Global Minimum Tax provides for a coordinated system of taxation intended to ensure large
MNE groups pay a minimum level of tax on the income arising in each jurisdiction where they operate. A
minimum level of tax limits tax competition based on low rates which, in turn, reduces the tax incentive for
profit shifting. Developing countries may benefit from these changes to the wider international corporate
tax environment even before or sometimes without adopting the rules themselves.
43. Profit shifting by large multinational enterprises has presented a significant challenge to developing
countries. Developing countries lose substantial revenue to base erosion and profits shifting activities of
such multinationals, with some studies suggesting they were more exposed to profit-shifting than
developed countries ( (Cobham, 2018)). Prior to the development of the Global Minimum Tax, large,
developed jurisdictions had developed sophisticated rules which attempted to address tax avoidance.
However, such rules were frequently both complicated and difficult for lower capacity jurisdictions to
administer. As a result, developing countries were often limited with respect to the unilateral domestic
actions which could be effectively taken to ensure the integrity of their tax base.
44. The Global Minimum Tax helps to address profit shifting by reducing effective tax rate differentials
between jurisdictions. Prior to the Global Minimum Tax, a multinational that successfully engaged in profit
shifting could shift profit from a developing country to a jurisdiction where it may pay low or no corporate
income tax. The adoption of the Global Minimum Tax ensures that regardless of the jurisdiction in which
the profit is booked, the income in that jurisdiction will be subject to a minimum tax of 15%. This
substantially reduces the incentive for multinationals to engage in profit shifting as there is far less of a
benefit to doing so. The OECD’s Economic Impact Assessment estimates that approximately one third of
the revenue gains from the Global Minimum Tax will arise due to reduced profit shifting (OECD, 2024).

© OECD 2024
 | 22

45. The Global Minimum Tax also benefits developing countries due to the impact it has on tax
competition. Many countries, including developing countries, have been caught in a ‘race to the bottom’
with respect to corporate taxation. For developing countries, which tend to have high statutory tax rates,
the race to the bottom has resulted in strong pressure to offer tax incentives to attract foreign investment.
Often these incentives have been wasteful and offered poor value for money. A recent OECD study found
that 90% of a sample of developing countries had a tax incentive that allowed MNEs to pay no corporate
tax at all (OECD, 2022). This competitive dynamic prevents jurisdictions from raising tax revenues from
MNE affiliates operating in their jurisdictions.
46. The adoption of the Global Minimum Tax puts multilaterally agreed limits on tax competition. This
means that regardless of where the multinational locates the investment, it will be subject to a minimum
level of taxation. Accordingly, a ‘floor’ has been imposed on tax competition which removes the pressure
to provide tax rates below the minimum in the absence of economic activity. This does not mean that
developing countries are not able to offer tax incentives. Responding to the views expressed by some
developing countries, the Global Minimum Tax contains a Substance-based Income Exclusion which
means that the Global Minimum Tax will not apply to a formulaic return on the employees and tangible
assets located in the jurisdiction. Accordingly, developing countries should still have scope to use tax
incentives to attract foreign direct investment that results in real tangible assets and jobs in their jurisdiction.
However, where tax incentives offer poor value for money in terms of the tax revenue lost relative to
investment and jobs generated, the multilaterally agreed floor will protect domestic tax bases from
excessive tax competition. This should provide incentives for developing countries to shift their use of tax
incentives towards those that offer better value for money (OECD, 2022), (World Bank, 2022).
47. In addition to the wider system benefits outlined above, the Global Minimum Tax provides
developing countries with a tool to raise revenue by changing their domestic tax law: the Domestic
Minimum Top-Up Tax (DMTT). In essence, adopting a DMTT allows a developing country to ensure that it
is collecting the minimum tax with respect to income arising in its jurisdiction. The Global Minimum Tax
gives priority to the location where the relevant profits are located. Accordingly, by adopting a DMTT
developing countries can receive the minimum tax revenue arising in their jurisdiction without harming their
competitive position as a location for investment. In fact, some studies have suggested that reduced
competitive pressure for investment from low-tax jurisdictions could lead to more investment in high-tax
jurisdictions due to the implementation of the minimum tax (Keen, Liu, & Pallan, 2023).
48. While many developing countries have high statutory tax rates, the provision of various tax
concessions and incentives means that there are significant amounts of low tax income in developing
countries. Recent OECD estimates (OECD, 2024) note that approximately 53% of all global low tax profit
is in jurisdictions with an average effective (not statutory) tax rate above 15%. Furthermore, approximately
one-fifth of all profit located in low- and middle-income countries is taxed at a rate below 15%.
49. Accordingly, the OECD estimates (OECD, 2024) that there are substantial low-taxed revenues in
developing countries. With full adoption, the Global Minimum Tax is expected to raise corporate tax
revenues by between 3.6 and 7.8% in developing economies. Overall, adoption of the Global Minimum
Tax is expected to raise between USD 155 and 192 billion in additional corporate tax revenues per year –
an increase of 6.5 to 8.1% of global corporate income tax revenues. One third of these revenue gains are
estimated to come from a reduction in global corporate profit shifting, and two thirds from direct top-up
taxation.
50. At the same time, enacting a DMTT is not the only policy option available to developing countries.
Developing jurisdictions may also choose to revisit their tax incentives or otherwise modify their domestic
corporate income tax regimes in light of the Global Minimum Tax. These policy options are not limited to
otherwise raising tax rates to the minimum level. The IMF has also noted the potential for the Global
Minimum Tax to encourage jurisdictions to raise domestic taxes above the minimum tax rate which could
raise global corporate income tax revenues by an additional 8.1% (IMF, 2023).

© OECD 2024
23 |

3.2.1. Capacity Building Support on the Global Minimum Tax

51. The 2023 Progress Report discussed in detail several capacity building initiatives for developing
countries with respect to the Global Minimum Tax. This included OECD pilot programmes in addition to
cooperative work conducted through the Platform for Collaboration on Tax (“PCT”), which is a joint effort
of the IMF, OECD, the WBG, and the United Nations. These programmes are summarised in the box
below.

Box 6: Examples of Capacity Building Support Programmes

• OECD bespoke bilateral assistance: The OECD Secretariat established a series of pilot programmes aimed at helping developing
countries proactively consider their policy choices under the Global Minimum Tax. Nine developing countries are participating: Egypt,
Georgia, Jamaica, Malaysia, Namibia, Nigeria, Peru, Senegal, and Thailand. The programmes aim to both support developing
countries to implement the Global Minimum Tax, including a DMTT where they wish to do so; and to analyse the impact of the GloBE
Rules on their tax revenues and their tax incentive regimes. The OECD Secretariat is also engaging bilaterally with other interested
jurisdictions, working with other international partners where possible.
• OECD regional outreach events: The OECD Secretariat has delivered, in collaboration with regional partners, a round of regional
consultations with a focus on the Two-Pillar Solution. Two in-person events for Asia and the Pacific region, and Europe took place in
2023 in partnership with five regional partners. In 2024, two regional consultations were conducted for Latin America and the
Caribbean, and for Francophone African countries. In addition, the OECD Secretariat has organised several regional workshops that
focus on the implementation on the Global Minimum Tax, sometimes with a specific focus on the implementation of a DMTT and
drafting of legislation. Five in-depth workshops were held between May and October 2023.
• Tax Inspectors Without Borders (TIWB): TIWB offers programmes to developing countries to build capacity with respect to the
Global Minimum Tax. These programmes offer advice and analytical services as well as providing support in the field to ministries of
finance and tax administrations through TIWB experts. Each project is based upon bespoke terms of engagement set bilaterally to
accommodate the specific circumstances of the relevant jurisdiction. TIWB is a joint OECD/UN Development Programme initiative.

3.2.2. Guidance on the implementation of the Global Minimum Tax

52. In addition to pilot programmes and other directly provided capacity building support, there are a
wide range of materials which have been released to support developing countries with respect to the
Global Minimum Tax.
a. OECD Economic Impact Assessments: The OECD released a global updated assessment in
January 2024 (OECD, 2024). In addition, the OECD Secretariat has bilaterally shared jurisdiction-
specific estimates with the members of the Inclusive Framework. The estimates included direct
revenue gains from the QDMTT, IIR and UTPR mechanisms, as well as additional gains due to a
reduction in profit-shifting behaviour by firms. Since then, the Secretariat has engaged bilaterally
with a number of jurisdictions on their request to provide technical assistance in understanding
and validating the revenue estimates using their own jurisdictional data. The OECD Secretariat
has also been engaging bilaterally with jurisdictions to assist them in arriving at their own impact
assessment of the Global Minimum Tax on their tax system, and in particular on any CIT tax
incentives they may have in place.
b. OECD E-learning material: Webinars, e-learning modules and live Q&A sessions have been
provided by OECD’s Global Relations Programme on Taxation. A dedicated GloBE e-learning
module has been released on the Knowledge Sharing Platform for Tax Administrations (KSPTA),
which is a global online resource developed and maintained by the Canada Revenue Agency for
sharing knowledge and expertise between tax administration. Additional material will continue to
be developed to reflect the demand for more courses and to cover new material agreed by the
Inclusive Framework.
c. OECD FTA Pillar Knowledge Sharing Network: The OECD’s Forum on Tax Administration
(FTA) has established a Pillar Knowledge Sharing Network (PKSN) led by the United Kingdom’s

© OECD 2024
 | 24

tax administration, and hosted on the KSPTA, to help developing countries learn about the
implementation of Pillar One and Pillar Two from others. The aim of the PKSN is to facilitate ‘quick
answers to quick questions’, and high-level conversations between different tax administrations
about how they have approached administrative issues relating to the implementation of the
Pillars, focussing initially on issues related to the Global Minimum Tax. It also facilitates virtual
presentations from country representatives on several technical topics, followed by an open
discussion.
d. OECD Handbook: The ‘’Minimum Tax Implementation Handbook (Pillar Two)’’ (Implementation
Handbook) (OECD, 2023) was published in 2023. The Implementation Handbook provides an
overview of the key provisions of the Global Minimum Tax and sets out relevant considerations in
assessing implementation options. The considerations include assessing the revenue gains, the
implications on jurisdictions’ current corporate tax system and the reform options with introducing
the IIR, UTPR and/or the DMTT. The Handbook also includes further reflections on the different
legislative techniques for implementing the rules.
e. OECD Papers: The OECD has released a paper addressing the impact of the Global Minimum
Tax on offering tax incentives (OECD, 2022).
f. ATAF Domestic Minimum Top-up Tax Suggested Approaches: The African Tax Administration
Forum has released Suggested Approaches to Drafting Domestic Minimum Top-up Tax (DMTT)
Legislation. These provide draft legislation to support developing countries to adopt a domestic
minimum top-up tax to collect the Global Minimum Tax revenue with respect to profits located in
their jurisdiction.
g. IISD Guide for Developing Countries: The International Institute for Sustainable Development
has released a Guide for Developing Countries on How to Understand and Adapt to the Global
Minimum Tax. The Guide examines a range of possible policy responses and provides an
assessment method to understand Global Minimum Tax’s likely impact at the country level. It also
addresses possible barriers to reform.
h. IMF Papers: The IMF have released several papers addressing the impact of the Global Minimum
Tax on developing countries including ‘Deciphering the GloBE in a Low-Tax Jurisdiction’ (IMF,
Deciphering the GloBE in a Low-Tax Jurisdiction, 2024), ‘Efficient Economic Rent Taxation under
a Global Minimum Corporate Tax‘ (IMF, 2024) and ‘International Corporate Tax Reform’ (IMF,
2023).
i. Platform for Collaboration on Tax (PCT): The PCT has committed to updating the Toolkit
Options for Low Income Countries’ Effective and Efficient Use of Tax Incentives for Investment,
first published in 2015, to reflect the impact of Pillar Two.
j. WBG Report: The WBG released ‘The Global Minimum Tax: from agreement to implementation’
Report in 2022 (World Bank, 2022). This report evaluates the key policy considerations and
provides a framework for evaluation of the implementation options. It also makes implementation
recommendations.

3.3. Broader digitalisation challenges for developing countries

53. There are broader digitalisation challenges for developing countries beyond the Global Minimum
Tax (and others that are relevant beyond the present theme of digitalisation – see, for example, the 2023
Report to the G7 Finance Ministers and Central Bank Governors on International Tax and Africa (OECD,
2023). These include the work being done to give effect to the Subject to Tax Rule, the ongoing work in

© OECD 2024
25 |

the digitalisation of tax administrations and the implementation of the policy framework for addressing the
VAT challenges of the digital economy.

3.3.1. Subject to Tax Rule

54. The Subject to Tax Rule (STTR) is an integral part of Pillar Two of the Two-Pillar Solution. This
rule is especially important for developing country Inclusive Framework members. Its design has been
significantly shaped by developing countries participating in the Inclusive Framework. The STTR is a
treaty-based rule that allows developing countries to impose additional taxation on certain intra-group
payments, including all intra-group services, in instances where these payments are subject to a nominal
corporate income tax rate below 9% in a treaty-partner jurisdiction.
55. Members of the Inclusive Framework that apply corporate income tax rates below 9% to covered
payments have committed to include the STTR in treaties with developing countries if requested to do so.
More than 70 members of the Inclusive Framework are ‘developing’ for this purpose and the STTR could
be requested in more than 1,000 treaties. The Inclusive Framework agreed a process to facilitate the
implementation of the STTR, ensuring that developing countries have all the information needed to
formulate a request.
56. The Inclusive Framework has also adopted the text of a multilateral instrument to assist the swift
and efficient implementation of the STTR. The OECD has been, and will continue to, support governments
in the process of its signature and ratification. The first signing ceremony will be held in the second half of
2024.

3.3.2. The digitalisation of tax administration

57. The update of tax administration for the digital age will be vital for the delivery of improved services
for taxpayers, and increased revenues for governments. The opportunity for developing countries to
‘leapfrog’ from legacy systems to modern technology-based systems is significant, offering new ways for
increasing revenue and expanding the tax base, more efficient use of resources, as well as enabling the
completion of more risk assessments, using more sophisticated tools. These issues were explored in the
OECD 2021 report Supporting the Digitalisation of Developing Country Tax Administrations (OECD,
2021[20]).
58. Digitalisation also creates the opportunity to take advantage of advances in tax co-operation, such
as electronic invoicing and more efficient third-party reporting, paving the way toward more efficient and
connected systems. However, there are many challenges associated with the digitalisation of
administration, including having the experts needed to provide capacity building.
59. The FTA continues to increase its engagement and collaboration with regional tax organisations
and other international organisations to ensure that developing countries can share their perspective on
moving from the digitalisation of tax administration to more fundamental digital transformation. To support
this, the FTA has created a Digital Transformation Maturity Model, which allows jurisdictions to measure
and compare their current maturity as well as to consider possible future reforms, as well as hands-on
assistance through the Tax Inspectors Without Borders program. In addition, the OECD has developed
the web-based Inventory of Tax Technology Initiatives both to provide a global picture of the use of new
technology tools as well as provide more detailed information through country case-studies to help inform
country strategies. Through these programmes the exchange of knowledge and skills between advanced
and advancing administrations is being facilitated.

© OECD 2024
 | 26

3.3.3. VAT on e-commerce and digital trade

60. As outlined in the 2023 Report, VAT is often the main source of revenues for developing countries
(on average in 2021, representing 30% of total tax take in Latin America and the Caribbean, 26% in Asia-
Pacific, and 28% in Africa) (OECD, 2023).
61. The OECD has delivered a comprehensive and internationally agreed policy framework for
addressing the VAT challenges of the digital economy based on the International VAT/GST Guidelines
(OECD, 2017) and subsequent detailed implementation guidance. This framework has already been
implemented in over 100 jurisdictions. As outlined in the 2023 Report, three regional VAT Digital Toolkits
have been developed in partnership with the WBG and regional organisations including CIAT, IDB, ADB
and ATAF. The OECD also provided targeted technical assistance in 2023 to individual jurisdictions on the
implementation and administration of reform to address the VAT challenges of e-commerce.
Comprehensive bespoke technical assistance was provided Botswana (in partnership with ATAF), Egypt,
Fiji, Georgia, Jamaica (in partnership with the WBG) and Peru. Supported by this technical assistance,
notably Egypt reformed its VAT to apply to international supplies of digital services with effect from June
2023. Ad-hoc technical assistance on specific components of VAT reform was provided to a further eight
jurisdictions during the year. In addition, comprehensive workshops with developing economies on the
implementation and administration of VAT were held, including (online) workshops in Botswana, Honduras,
and Jamaica and with a high-level Brazilian delegation in Paris.
62. VAT remains a crucial source of revenues for developing countries and it remains important that
capacity building and technical assistance continue to be provided to ensure that VAT can be successfully
administered with respect to digital businesses and e-commerce.

3.4. Conclusion

63. Ensuring that developing countries are well placed to take advantage of the changes in the
international tax architecture remains a core focus for a wide range of organisations, as a way to enhance
domestic resource mobilisation. This includes ensuring that developing countries can make the most of
the opportunities afforded by the Global Minimum Tax, as well as in other core areas such as VAT and tax
administration. This should be done through the provision of capacity building, as well as ensuring that the
priorities of developing countries are better reflected in the Inclusive Framework’s agenda. Significant
progress has been made in delivering capacity building and improving the participation of developing
countries in the Inclusive Framework, and these efforts will continue for years to come, with the support of
international partners.

Conclusions and next steps

Developing countries:
Work with international and regional organisations for delivery of capacity building, including on the Global Minimum Tax and
beyond.
Champion dialogue on identifying and promoting policies that support domestic resource mobilisation, based on the needs and
priorities of developing countries.

© OECD 2024
27 |

References

ATAF. (2021). African Tax Outlook. Retrieved from

https://events.ataftax.org/index.php?page=documents&func=view&document_id=155
ATAF. (n.d.). ATAF Suggested Approach to Drafting Domestic Minimum Top-Up Tax Legislation.
Retrieved from
https://events.ataftax.org/index.php?page=documents&func=view&document_id=191
Cobham, A. a. (2018). Global distribution of revenue loss from corporate tax avoidance: re‐estimation
and country results. Journal of International Development, Vol. 30/2, pp. 206-232.
IMF. (2023). International Corporate Tax Reform; Policy Paper No. 2023/001; February 2023. IMF,
Washington D.C. Retrieved from https://www.imf.org/en/Publications/Policy-
Papers/Issues/2023/02/06/International-Corporate-Tax-Reform-529240
IMF. (2024). Deciphering the GloBE in a Low-Tax Jurisdiction.
IMF. (2024). Efficient Economic Rent Taxation under a Global Minimum Corporate Tax.
Keen, M., Liu, L., & Pallan, H. (2023). International Tax Spillovers and Tangible Investment, with
Implications for the Global Minimum Tax. World Bank Policy Research Working Paper 10427.
OECD. (2016). Advanced Analytics for Better Tax Administration: Putting Data to Work. OECD
Publishing, Paris. doi:https://dx.doi.org/10.1787/9789264256453-en
OECD. (2016). Co-operative Tax Compliance: Building Better Tax Control Frameworks. OECD
Publishing.
OECD. (2017). International VAT/GST Guidelines. Paris: OECD Publishing.
OECD. (2018). Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque
Offshore Structures. OECD, Paris. Retrieved from https://www.oecd.org/tax/exchange-of-tax-
information/model-mandatory-disclosure-rules-for-crs-avoidance-arrangements-and-opaque-
offshore-structures.htm
OECD. (2020). Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing
and Gig Economy. OECD, Paris. Retrieved from https://www.oecd.org/tax/exchange-of-tax-
information/model-rules-for-reporting-by-platform-operators-with-respect-to-sellers-in-the-
sharing-and-gig-economy.htm
OECD. (2020). Tax Administration 3.0: The Digital Transformation of Tax Administration. OECD, Paris.
Retrieved from https://www.oecd.org/tax/forum-on-tax-administration/publications-and-
products/tax-administration-3-0-the-digital-transformation-of-tax-administration.htm
OECD. (2021). Supporting the Digitalisation of Developing Country Tax Administrations. OECD, Paris.
Retrieved from https://www.oecd.org/tax/administration/supporting-the-digitalisation-of-
developing-country-tax-administrations.htm
OECD. (2021). Tax Challenges Arising from Digitalisation of the Economy – Global Anti-Base Erosion
Model Rules (Pillar Two): Inclusive Framework on BEPS. In OECD/G20 Base Erosion and Profit
Shifting Project. OECD Publishing, Paris. doi:10.1787/782bac33-en

© OECD 2024
 | 28

OECD. (2021). Unleashing the potential of automatic exchange of information for developing countries -
2021 Strategy. OECD, Paris. Retrieved from
https://www.oecd.org/tax/transparency/documents/aeoi-strategy-developing-countries.pdf
OECD. (2022). Bilateral Advance Pricing Arrangement Manual. In OECD Forum on Tax Administration.
OECD Publishing, Paris. doi:10.1787/4aa570e1-en
OECD. (2022). Crypto-Asset Reporting Framework and Amendments to the Common Reporting
Standard. OECD, Paris. Retrieved from https://www.oecd.org/tax/exchange-of-tax-
information/crypto-asset-reporting-framework-and-amendments-to-the-common-reporting-
standard.htm
OECD. (2022). Digital Transformation Maturity Model. OECD, Paris. Retrieved from
https://www.oecd.org/tax/forum-on-tax-administration/publications-and-products/digital-
transformation-maturity-model.htm
OECD. (2022). OECD Investment Tax Incentives Database – 2022 Update: Tax incentives for
sustainable development. Paris: OECD Publishing. Retrieved from
www.oecd.org/investment/investment-policy/oecdinvestment-tax-incentives-database-2022-
update-brochure.pdf
OECD. (2022). Progress Report on Amount A of Pillar One: Two-Pillar Solution to the Tax Challenges of
the Digitalisation of the Economy. In OECD/G20 Base Erosion and Profit Shifting Project. OECD,
Paris. Retrieved from https://www.oecd.org/tax/beps/progress-report-on-amount-a-of-pillar-one-
two-pillar-solution-to-the-tax-challenges-of-the-digitalisation-of-the-economy.htm
OECD. (2022). Progress Report on the Administration and Tax Certainty Aspects of Amount A of Pillar
One: Two-Pillar Solution to the Tax Challenges of the Digitalisation of the Economy. OECD,
Paris. Retrieved from https://www.oecd.org/tax/beps/progress-report-on-the-administration-and-
tax-certaint-aspects-of-amount-a-of-pillar-one-two-pillar-solution-to-the-tax-challenges-of-the-
digitalisation-of-the-economy.htm
OECD. (2022). Public consultation document: Pillar Two – Tax Certainty for the GloBE Rules, 20
December 2022 – 3 February 2023. OECD, Paris. Retrieved from
https://www.oecd.org/tax/beps/public-consultation-document-pillar-two-tax-certainty-for-the-
globe-rules.pdf
OECD. (2022). Tax Administration 2022: Comparative Information on OECD and other Advanced and
Emerging Economies. doi:10.1787/1e797131-en
OECD. (2022). Tax Administration 3.0 and Electronic Invoicing: Initial Findings. In OECD Forum on Tax
Administration. OECD Publishing, Paris. doi:10.1787/2ffc88ed-en
OECD. (2022, December 20). Tax challenges of digitalisation: OECD invites comments on compliance
and tax certainty aspects of global minimum tax. Retrieved from
https://www.oecd.org/tax/beps/oecd-invites-comments-on-compliance-and-tax-certainty-aspects-
of-global-minimum-tax.htm
OECD. (2022). Tax Co-operation for the 21st Century: OECD Report for the G7 Finance Ministers and
Central Bank Governors, May 2022, Germany. OECD, Paris. Retrieved from
https://www.oecd.org/tax/tax-co-operation-for-the-21st-century-oecd-report-g7-may-2022-
germany.htm
OECD. (2022). Tax Incentives and the Global Minimum Corporate Tax: Reconsidering Tax Incentives
after the GloBE Rules. Paris: OECD Publishing. doi:https://doi.org/10.1787/25d30b96-en
OECD. (2022). The Global Revenue Statistics Database. Retrieved April 21, 2023, from
https://www.oecd.org/tax/tax-policy/global-revenue-statistics-database.htm
OECD. (2023). International Tax and Africa: OECD Report for the G7 Finance Ministers and Central
Bank. Paris: OECD Publishing. doi:https://doi.org/10.1787/6f19e5ed-en.

© OECD 2024
29 |

OECD. (2023). Manual on the Handling of Multilateral Mutual Agreement Procedures and Advance
Pricing Arrangements: Enhancing Tax Certainty. In OECD Forum on Tax Administration. OECD
Publishing, Paris. doi:10.1787/f0cad7f3-en
OECD. (2023). Minimum Tax Implementation Handbook . Paris: OECD publishing.
OECD. (2023). Progress Report on Tax Co-operation for the 21st Century: OECD Report for the G7
Finance Ministers and Central Bank Governors. Paris: OECD Publishing.
OECD. (2023, January 25). Signatories of the MCAA on the Automatic Exchange Regarding CRS
Avoidance Arrangements and Opaque Offshore Structures. Retrieved April 21, 2023, from
https://www.oecd.org/tax/exchange-of-tax-information/mdr-mcaa-signatories.pdf
OECD. (2023, February 15). Signatories of the Multilateral Competent Authority Agreement on Automatic
Exchange of Information on Income Derived Through Digital Platforms. Retrieved April 21, 2023,
from https://www.oecd.org/tax/exchange-of-tax-information/dpi-mcaa-signatories.pdf
OECD. (2023). Tax Challenges Arising from the Digitalisation of the Economy – GloBE Information
Return (Pillar Two), OECD/G20 Inclusive Framework on BEPS, OECD, Paris.
OECD. (2024). The Global Minimum Tax and the taxation of MNE profit. Paris: OECD Publishing.
OECD. (n.d.). Tax Challenges Arising from the Digitalisation of the Economy – GloBE.
PCT. (2018). First Global Conference of the Platform for Collaboration on Tax - Conference Report.
Retrieved from https://www.tax-platform.org/sites/pct/files/publications/130559-WP-
ReportFinalMar.pdf
World Bank. (2022). The Global Minimum Tax: from agreement to implementation. Overview booklet.
Information and Communications for Development, License: Creative Commons Attribution CC
BY 3.0 IGO.

© OECD 2024
This report reflects on the implications of the evolving
international tax policy landscape for international tax co-
operation, and provides an update on the 2022 Report “Tax Co-
operation for the 21st Century” and the 2023 Progress Report.
The principles of tax co-operation set out in those reports have
become even more important in light of the implementation of the
Global Minimum Tax, which took effect from the beginning of this
year. This report sets out the advances being made in
implementing the vision for co-operation amongst tax
administrations with a specific focus on the Global Minimum Tax.
It also sets out areas of tax co-operation beyond the corporate
tax system looking at recent developments in the exchange of
information between tax administration as well as other
transparency initiatives with respect to taxation of individuals.
Finally, it addresses the implications of these developments in the
international tax system for developing countries with respect to
both direct and indirect taxes as well as the digitalisation of tax
administration.

This report was prepared by the OECD to inform the discussions

at the May 2024 meeting of G7 Finance Ministers and Central
Bank Governors, at the request of the G7 Italian Presidency.