PARIS (Reuters) - The biggest overhaul of cross-border tax rules in a generation is now on course to take effect in 2024, the Organisation for Economic Cooperation and Development said on Monday in an update on the project for G20 finance ministers.
The shake-up, which has been shepherded by the OECD and which nearly 140 countries agreed to last year, aims to take better account of the emergence of big digital companies, such as Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) that can book profits in low-tax countries.
The first pillar of the two-track reform aims to reallocate 25% of profits from the world's largest multinationals for taxation in the countries where their clients are regardless of the companies' physical location. The second pillar aims to set global minimum corporate tax rate of 15%.
Both pillars were originally due to be implemented next year, although that was always seen as highly ambitious given the difficulty of agreeing complex changes to many countries' tax laws.
"We will keep working as quickly as possible to get this work finalised, but we will also take as much time as necessary to get the rules right," OECD Secretary General Mathias Cormann said in statement.
"These rules will shape our international tax arrangements for decades to come," he added.
The OECD said in a report for G20 finance ministers this week in Bali that the new timetable for the first pillar set a hard mid-2023 deadline for sign-off on the multilateral legal framework underpinning it so it can enter into force in 2024.
Meanwhile, it said most countries were planning legislation to adopt the global minimum tax rate so that it also enters into force in 2024.