G20 Finance Ministers welcome progress made on BEPS 2.0 project

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EY Global

27 Jul 2023
Subject Tax Alert
Categories BEPS 2.0
  • The summary released at the conclusion of the 17-18 July 2023 meeting of the G20 Finance Ministers and Central Bank Governors reaffirms the G20 Finance Ministers' commitment to continue cooperation on reforming the international tax system and welcomes progress on Pillars One and Two of the BEPS 2.0 project.
  • The G20 Finance Ministers' continuing endorsement is intended to encourage jurisdictions to move quickly to implement the new rules.
  • Companies should follow developments closely as they unfold in the coming months, evaluate the potential impact of international tax changes on their businesses, and monitor implementation activity in relevant countries.

Executive summary

On 17 and 18 July 2023, the G20 Finance Ministers and Central Bank Governors met in Gandhinagar, India. The G20 Outcome Document and Chair's Summary (pdf) issued at the conclusion of the meeting reaffirms the G20 Finance Ministers' commitment to continue cooperation toward a globally fair, sustainable and modern international tax system appropriate to the needs of the 21st century. With respect to Pillars One and Two of the project on addressing the tax challenges of the digitalization of the economy (the BEPS 2.0 project), the summary welcomes the progress reflected in the 12 July 2023 outcome statement joined by 138 of the 143 jurisdictions participating in the Inclusive Framework on BEPS.

In advance of the meeting, the Organisation for Economic Co-operation and Development (OECD) released the OECD Secretary-General's Tax Report to the G20 Finance Ministers and Central Bank Governors (pdf) (the Secretary-General Report), which provides an update on activities with respect to the G20's international tax agenda, including ongoing work on the BEPS 2.0 project, tax transparency, tax policy and climate change. The OECD also released an update requested by the G20 Finance Ministers on the OECD/G20 Roadmap on Developing Countries and International Taxation. In addition, at the request of the Indian G20 Presidency, the OECD released reports on Enhancing International Tax Transparency on Real Estate (pdf)Update on the Implementation of the 2021 Strategy on Unleashing the Potential of Automatic Exchange of Information for Developing Countries (pdf) and Facilitating the Use of Tax-Treaty-Exchanged Information for Non-tax Purposes (pdf).

Detailed discussion


In October 2021, the OECD released a statement reflecting the high-level agreement of Inclusive Framework member jurisdictions on core design elements of Pillars One and Two of the BEPS 2.0 project.1

Since that agreement was reached, the Inclusive Framework released a series of significant agreed documents on the global minimum tax under Pillar Two, including Model Global Anti-Base Erosion (GloBE) Rules,2 Commentary to the Model GloBE Rules,3 guidance on GloBE Safe Harbors4 and GloBE Administrative Guidance.5 The OECD also released two public consultation documents, seeking input from stakeholders on areas where work is ongoing in the Inclusive Framework but consensus had not yet been reached, which cover a standardized GloBE Information Return6 and potential dispute prevention and resolution mechanisms to provide tax certainty for the GloBE Rules.7

During 2022, the OECD also released a series of public consultation documents on the nexus and profit allocation rules under Pillar One.8 These working drafts did not yet reflect consensus agreement in the Inclusive Framework and were released to obtain input from stakeholders.

On 12 July 2023, the OECD released an outcome statement reflecting the agreement reached by 138 of the 143 Inclusive Framework member jurisdictions on the remaining elements of their project addressing the tax challenges of the digitalization of the economy (the BEPS 2.0 project).9 The July 2023 statement summarizes Inclusive Framework deliverables on (i) the Multilateral Convention (MLC) on Amount A of Pillar One, (ii) the report on Amount B of Pillar One, (iii) the Subject to Tax Rule (STTR) under Pillar Two, and (iv) plans for implementation support for countries.

On 17 July 2023, the OECD released a series of documents on Pillar Two approved by the Inclusive Framework: additional administrative guidance on the GloBE Rules,10 the GloBE information return11 and a report on the STTR.12 At the same time, the OECD released a public consultation document on Amount B.13

G20 Outcome Document and Chair's summary

At the conclusion of the 17-18 July G20 Finance Ministers and Central Bank Governors meeting, the Indian Chair issued an outcome document summarizing the discussion. The summary reflects the G20's continued focus on the BEPS 2.0 project, stating:

We reaffirm our commitment to continue cooperation towards a globally fair, sustainable and modern international tax system appropriate to the needs of the 21st century. We welcome the delivery of a text of a Multilateral Convention (MLC) on Amount A, significant progress of work on Amount B and the completion of the work on the development of the Subject to Tax Rule (STTR) and its implementation framework as set out in the July 2023 Outcome Statement of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework). We call on the Inclusive Framework to swiftly resolve the few pending issues relating to the MLC with a view to prepare the MLC for signature in the second half of 2023 and complete the work on Amount B by end of 2023. We welcome the steps taken by various countries to implement the Global Anti-Base Erosion (GloBE) Rules as a common approach. We recognise the need for coordinated efforts towards capacity building to implement the two-pillar international tax package effectively and in particular, welcome a plan for additional support and technical assistance for developing countries.

The summary also notes the several tax reports prepared for the G20 by the OECD Secretariat and the discussions held at the G20 High-Level Tax Symposium on Combatting Tax Evasion, Corruption and Money Laundering. In addition, it welcomes the launch of the pilot program on tax and financial crime investigation by the South Asia Academy in collaboration with the OECD, calls for the swift implementation of the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard, and asks the Global Forum on Transparency and Exchange of Information for Tax Purposes to identify a timeline for commencing exchanges of CARF information in light of the aspirations of a significant number of jurisdictions to begin exchanging this information by 2027.

July 2023 OECD Secretary-General Report

The Secretary-General Report includes an update on the ongoing work on Pillars One and Two, indicating that the implementation of the global minimum tax is now well underway and will come into effect from the beginning of 2024. With the aim of ensuring a consistent and effective implementation of the GloBE Rules under Pillar Two, the Inclusive Framework has agreed to adopt a process for reviewing each jurisdiction's implementation of the GloBE Rules, covering both legislation and administrative aspects. In addition, the OECD Secretariat is developing a handbook to support effective implementation of the GloBE Rules, which will provide a step-by-step approach, including illustrations of the application of the rules, with a view to making the technical content of the GloBE Rules more accessible, to be delivered to the G20 Finance Ministers in October 2023.

The Secretary-General Report discusses developments with respect to tax transparency, noting recent updates on information reporting with respect to crypto-assets and implementation of effective information exchange practices. It indicates that the Global Forum will put in place frameworks to build on its commitment and monitoring processes to support the effectiveness of the Automatic Exchange of Financial Account Information (AEOI) standards. The Secretary-General Report references three new documents related to tax transparency that were prepared at the request of the Indian G20 Presidency:

  1. A report on Enhancing International Tax Transparency on Real Estate, which reviews the current state of tax transparency with respect to foreign-owned real estate and includes ideas that interested jurisdictions could pursue to ensure their tax administrations receive tax-relevant information on real estate held abroad. According to the report, the experience of designing the Common Reporting Standard for AEOI and similar frameworks can serve as a helpful blueprint in identifying the relevant building blocks for improved tax transparency in the real estate sector.

    For the short term, the report discusses the potential design of a common approach to exchange of information that could consist of three modules: (i) information on real estate holdings by nonresidents; (ii) information on real estate transactions; and (iii) information on recurrent real estate income.

    For the long term, the report discusses two potential pathways to address any remaining challenges: (i) development of a more structured approach for the exchange of information; and (ii) contemplation of a direct access model through interconnected registers.
  2. An update report on Unleashing the Potential of Automatic Exchange of Information for Developing Countries, which reviews the progress made in the participation of developing jurisdictions in AEOI. It also provides an update on progress made in implementing a modular approach aimed at obtaining concrete progress by dividing technical assistance programs into several modules with specific targets to be achieved in order to move from one module to another. According to the report, the implementation of AEOI is bearing fruit where there is a strong commitment at political and technical levels. The report notes the growing interest of developing jurisdictions in implementing the AEOI as well as country-by-country (CbC) reporting and indicates that the capacity-building program needs to be further strengthened with additional resources to meet the increasing demand.
  3. A report on Facilitating the Use of Tax-Treaty-Exchanged Information for Non-tax Purposes, which highlights the benefits, conditions and challenges associated with using treaty-exchanged information for purposes other than tax. The report describes an approach for advancing and streamlining the wider use of treaty-exchanged information between interested jurisdictions, including through implementation of cooperation agreements (e.g., between competent authorities for exchange of information for tax purposes and between tax and non-tax authorities at the domestic level). It indicates that the suggested approach draws on work that has been carried out under the Latin America Initiative to streamline and facilitate wider use and contemplates a possible administrative framework to reduce implementation barriers and ensure that confidentiality requirements and data safeguards are upheld.

On tax policy and climate change, the Secretary-General Report indicates that by combining previous work on energy taxation, carbon taxation, and tradeable emissions permit prices along with data from the OECD Inventory of Support Measures for Fossil Fuels, a new indicator to better understand the combined impact of various factors on the effective price of CO2-emissions, known as the Net Effective Carbon Rate, has been produced. This new indicator allows comparison of price signals resulting from policies across fuels, users, sectors and countries. In addition, the report notes that the Inclusive Forum on Carbon Mitigation Approaches (IFCMA) held a meeting on 19-20 June 2023, with participation from 87 countries and international organizations, which fostered an active dialogue on how to proceed and garnered support for the general orientation of this new initiative. According to the report, the IFCMA recognizes the importance of diverse climate change policies tailored to each country's circumstances. The primary challenge is ensuring that individual emissions reduction efforts are globally effective and do not just shift emissions to other parts of the world. To help meet this challenge, the IFCMA aims to assess the various mitigation policy instruments used to reduce greenhouse gas emissions, with plans to estimate the emissions associated with these instruments and develop and apply a consistent methodology to assess the impact of mitigation policies on emission reductions at the country level.

The Secretary-General Report includes a status update on jurisdictions' implementation of the minimum standards established in the original BEPS project, relating to Actions 5 (harmful tax practices), 6 (tax treaty abuse), 13 (CbC reporting), and 14 (mutual agreement procedure). In addition, the report contains brief updates on several other areas of ongoing work, including value-added taxes (VAT) on digital trade, tax and crime, digital transformation of tax administration and tax certainty.

G20/OECD Roadmap on Developing Countries and International Tax

This roadmap is the third focused assessment of tax and development issues produced by the OECD for the G20 Finance Ministers. This update focuses on developing countries' engagement with respect to both the BEPS 2.0 project and the original BEPS project. It also covers priorities for developing countries beyond corporate income taxes, including environmental taxes and related mechanisms and VAT/goods and services taxes.

The roadmap discusses actions to be undertaken in support of developing countries' key international tax priorities, which include (i) maintaining and accelerating progress on implementing priority BEPS actions, in particular CbC reporting; (ii) supporting implementation of the BEPS 2.0 project outcomes; and (iii) exploring other priority areas for multilateral cooperation with developing countries with a particular focus on tax and the Sustainable Development Goals.

The roadmap also identifies four targets for support for developing countries in the priority areas:

  1. An additional 10 developing countries will be able to access CbC reports by September 2024 and 10 more by September 2025 and September 2026, assuming sufficient resources for capacity building are made available.
  2. Training, guidance and e-learning material on all completed aspects of the GloBE Rules will be available and accessible to all developing countries by the end of 2023, with updates as required on a timely basis.
  3. Along with the support already being provided to pilot countries on tax incentives and the GloBE Rules, it is expected that up to 15 additional countries will require bilateral assistance in 2024 and up to 30 more by the end of 2025.
  4. Technical assistance programs on the practical implementation of the GloBE and associated rules will be available for all developing countries requesting such programs by 2026.

The roadmap indicates that work supporting developing countries to respond to the GloBE Rules is urgent, noting that this also presents an opportunity for countries to implement reforms across their corporate tax bases, including tax incentives, over the longer term. In this regard, in 2022 the OECD Secretariat established a series of pilot programs aimed at helping developing countries proactively consider their policy choices in light of the agreement on the GloBE Rules. The programs aim both to support developing countries in implementing the GloBE Rules and to analyze their tax incentive regimes and how they may be impacted by the GloBE Rules. Nine developing countries are currently participating in these programs: Egypt, Georgia, Jamaica, Peru, Malaysia, Namibia, Nigeria, Senegal, and Thailand.

In addition, the roadmap indicates that the Inclusive Framework will continue to consider developing simplifications and safe harbors that would assist both jurisdictions and multinational entities in adjusting to the impact of the GloBE Rules.


The BEPS 2.0 project contemplates significant changes in the overall international tax architecture under which multinational businesses operate. The continuing endorsement by the G20 Finance Ministers of the progress made on both pillars is intended to encourage jurisdictions to move quickly to implement the new rules through changes in their domestic laws and the negotiation, signature and ratification of the multilateral instruments necessary to adjust their treaty relationships.

It is important for companies to follow these developments closely as they unfold in the coming months and to evaluate the potential impact of international tax changes on their businesses. In addition, companies will need to monitor implementation activity in relevant countries.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP (Netherlands)
  • Maikel Evers
  • David Corredor Velásquez
  • Roberto Aviles Gutiérrez
Ernst & Young LLP (United States)
  • Barbara M. Angus
  • Jose A. (Jano) Bustos

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.