OECD/G20 Inclusive Framework holds 14th plenary meeting and publishes 6th annual progress report

  • The OECD/G20 has published its sixth annual progress report describing developments in the work on addressing the tax challenges of the digitalization of the economy (BEPS 2.0 project) and other tax work.

  • In addition, the Inclusive Framework held its 14th plenary meeting, a portion of which was streamed for public viewing with discussion focused on tax policy related to climate change and tax transparency, among other topics.

  • As evidenced by the progress report and plenary meeting, significant activity in the Inclusive Framework is ongoing on both Pillar One and Pillar Two, with major releases expected with respect to both pillars before the end of the year.

Executive summary

On 4 October 2022, the Organisation for Economic Co-operation and Development (OECD) published the sixth annual progress report of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) (the Progress Report (pdf)). The Progress Report describes developments in the work on addressing the tax challenges of the digitalization of the economy (the BEPS 2.0 project) as well as other activity of the Inclusive Framework during the period from September 2021 to September 2022.

On 6-7 October 2022, the Inclusive Framework held its 14th plenary meeting, with over 500 delegates from over 135 jurisdictions participating either in person or virtually. Several sessions of the meeting were streamed for public viewing, including discussions on climate change and tax policy, tax transparency, digitalization of tax administration, and tax and development.

Detailed discussion

Sixth annual progress report of the Inclusive Framework

On 4 October 2021, the OECD published the sixth annual progress report of the Inclusive Framework. The update provided in the Progress Report is divided into five parts:

  • Overview

  • Implementation of the two-pillar solution under the BEPS 2.0 project

  • Implementation of BEPS minimum standards

  • Progress on other BEPS Actions

  • Support for developing countries

According to the Progress Report, since the high-level agreement reached in October 2021 on key parameters with respect to Pillar One and Pillar Two of the BEPS 2.0 project,1 the Inclusive Framework has focused on implementation. On Pillar One, the Report states that good progress has been made, noting the release in July 2021 of the Progress Report on Amount A of Pillar One in the form of a public consultation document.2 However, the Report indicates that the novelty of the concepts used in Amount A led the Inclusive Framework to conclude that further deliberation, including additional stakeholder input, was needed to finalize the design of the new rules properly. Therefore, the Inclusive Framework agreed to a new timeline for delivery on Amount A, with the aim of completing the work on the Multilateral Convention and related Explanatory Statement with respect to Amount A so that a signing ceremony can be held in the first half of 2023 for it to come into force in 2024 with ratification by a critical mass of jurisdictions. With respect to Amount B, which is intended to provide for fixed returns for baseline marketing and distribution activities, the Report indicates that a public consultation document is expected to be released by year-end.

On Pillar Two, the Progress Report notes the release of the Global Anti-Base Erosion (GloBE) Model Rules for the minimum tax in December 2021 and the related Commentary in March 2022, which is intended to enable Inclusive Framework member jurisdictions to begin implementing the global minimum tax rules.3 Further, the Report indicates that the GloBE Implementation Framework, which will include administrative guidance, a common filing process and safe harbors to reduce compliance costs, will be released in the second half of 2022. In addition, the Report states that the Subject to Tax Rule (STTR) draft model tax treaty provision and related commentary is expected to be released for public comment later in the year.

With respect to the 15 Actions under the original BEPS project, the Progress Report states that steady progress has continued, in particular on the implementation of the four BEPS minimum standards:

  • Action 5 on Harmful Tax Practices: The Report indicates that the Forum on Harmful Tax Practices (FHTP) has reviewed over 300 preferential regimes and the substance legislation of 12 no-tax or only nominal tax jurisdictions. In addition, over 41,000 exchanges of information on tax rulings have occurred between governments. The Report indicates that the FHTP will continue its peer reviews with respect to all of these aspects of the Action 5 minimum standard.

  • Action 6 on Tax Treaty Abuse: The Report refers to the March 2022 peer review report, which showed that the level of compliance has more than doubled since last year and that around 2,300 of the 2,400 tax treaties between Inclusive Framework member jurisdictions should become compliant with the Action 6 minimum standard soon. The Report indicates that the current peer review with respect to Action 6 is underway.

  • Action 13 on Country-by-Country (CbC) reporting: The Report refers to the October 2021 peer review report on the implementation of CbC reporting, noting that there are now more than 3,200 bilateral CbC exchange relationships in place between 83 jurisdictions. In addition, the fifth annual peer review on the implementation of CbC reporting was released on 4 October 2022, and the Report indicates that the work on the 2020 review of BEPS Action 13 will resume in the fourth quarter of 2022.

  • Action 14 on Mutual Agreement Procedure (MAP): The Report indicates that 82 jurisdictions have been reviewed under the two-stage approach established for the Action 14 peer review, but that work on the 2020 Action 14 review has been temporarily suspended to allow the Inclusive Framework and OECD Secretariat to prioritize work on the BEPS 2.0 project. The Report notes that the Action 14 minimum standard review will resume after further progress on that work and that discussions on reviewing the Assessment Methodology and the MAP Statistics Reporting Framework resumed in June 2022.

The Progress Report states that progress has also been made over the last year on other BEPS Action items, noting in particular BEPS Action 1 through the development of value-added tax Digital Toolkits for developing countries as well as BEPS Actions 8-10 through the release of the 2022 edition of the OECD Transfer Pricing Guidelines.4 The Report indicates that the fourth edition of the OECD’s Corporate Tax Statistics database, developed in connection with BEPS Action 11, will soon be released. The Report indicates that the new edition will further expand the coverage of CbC reporting statistics, with at least 45 jurisdictions reporting covering about 6,600 CbC reports and will contain new data on withholding tax rates.

On support for developing countries, the Progress Report describes the participation by developing countries in the Inclusive Framework and their progress on the BEPS minimum standards as reflected in the peer reviews. The Report also notes the work of the OECD/UNDP Tax Inspectors Without Borders (TIWB) initiative which provides support by matching experienced tax auditors with developing country tax administrations to assist with specific cases, particularly on transfer pricing audits.5 Looking ahead, the Report states that effective implementation of Pillars One and Two will be important to support domestic resource mobilization in developing countries. Ad hoc assistance is being provided to Inclusive Framework member jurisdictions needing help in the current work on finalizing the technical work on the BEPS 2.0 project. Once the rules and instruments for implementation are finalized, support will have to be geared more toward bespoke assistance on a bilateral basis to implement the rules into domestic law and to facilitate timely signature and ratification of the necessary legal instruments. Support also will be needed on putting the rules into practice.

Inclusive Framework 14th plenary meeting

Several sessions of the 14th plenary meeting of the Inclusive Framework were made available for public viewing, all of which focused on topics other than the ongoing work on Pillars One and Two (which was the subject of discussion among the Inclusive Framework jurisdictions during the closed sessions).

The session on climate change and tax policy began with a presentation by the OECD Secretariat on the new report on Pricing Greenhouse Gas Emissions and the 2022 edition of its annual Tax Policy Reforms report, which includes a special focus on policy response to the energy crisis. The Secretariat also provided an update on the creation of the Inclusive Forum on Carbon Mitigation Approaches, noting that the first meeting of this group is expected to take place in January 2023. The Finance Ministers of Colombia and Jamaica each gave presentations on the ongoing fiscal and tax reform activity in their countries, with a particular focus on tax policy considerations related to climate change including both carbon pricing and tax incentives. Both Ministers also took the opportunity to stress the need for more adaptation of the proposals on Pillars One and Two to the specific needs of developing countries. The session concluded with a conversation between Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration, and the new Director of the OECD’s work on the environment, focusing on the OECD’s work on tax and the environment.

The session on transparency began with a presentation by the Chair of the Global Forum on Transparency and Exchange of Information for Tax Purposes, focusing on developments with respect to the exchange of information on request and the automatic exchange of information. The session also included a presentation by the Co-Chairs of Working Party 10, providing a preview of the new document on the Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard which was released on 10 October 2022.6

The session on tax administration provided an update on the September meeting of the Forum on Tax Administration, with a focus on the FTA’s ongoing work on the digitalization of tax administration which is viewed by the participating tax authorities as essential. The objective is to deliver a seamless experience to taxpayers, with a view to reducing burdens, increasing compliance and addressing the tax gap. The future work of the FTA is intended to be collaborative, including input from taxpayers, and will be aimed at helping to accelerate tax administrations’ domestic efforts.

The session on tax and development began with a preview of the G20/OECD Roadmap on Developing Countries and International Taxation, which was prepared by the OECD Secretariat and released in advance of the 12-13 October 2022 meeting of the G20 Finance Ministers in Washington, DC.7 The session also included discussion of the recent OECD report on Tax Morale II: Building Trust Between Tax Administrations and Tax Authorities, the progress of developing countries on tax transparency, and the work of the TIWB initiative.

The public part of the Inclusive Framework meeting ended with concluding remarks from the OECD Secretariat-General, Mathias Cormann. He began by noting the progress that has been made by the Inclusive Framework since its first meeting in 2016, even through the severe disruptions resulting from the COVID-19 pandemic. He described the political agreement on the BEPS 2.0 project reached in October 2021 as the single most significant development in international taxation in a very long time, noting that is an example of the kind of multilateral cooperation that will be needed on a whole range of policy areas. He cautioned that the Inclusive Framework cannot relax yet, as there is still more work to be done to achieve an international tax system that is efficient, sustainable and fair.

With respect to the BEPS 2.0 project, the Secretary-General stressed the need to make Pillar One and Pillar Two a reality, warning that if this does not happen there will be a resurgence of uncoordinated measures creating disputes and controversy at a difficult time in the global economy. He also noted the need to do more to ensure that developing countries can reap the full benefits of the two pillars. Beyond BEPS 2.0, he called for continued focus on ensuring that all the international tax standards remain up to date and fit for purpose, noting that ongoing cooperation on tax transparency is essential. Looking forward, he described the Inclusive Forum on Carbon Mitigation Approaches as building on the success of the cooperative efforts of the Inclusive Framework, highlighting its focus on supporting jurisdictions’ policy actions to achieve their climate commitments.


Significant activity in the Inclusive Framework is ongoing on both Pillar One and Pillar Two, with major releases expected with respect to both pillars before the end of the year. At the same time, the Inclusive Framework is expanding its focus to new areas, including work on tax and climate change. It is important for companies to monitor these developments closely. Companies also may want to consider taking the opportunity to engage with the Inclusive Framework, including participating in the public consultations through the submission of written comments providing feedback on practical implications of the new rules that are being developed.


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

Ernst & Young Belastingadviseurs LLP, Rotterdam
  • Marlies de Ruiter
Ernst & Young Belastingadviseurs LLP, Amsterdam
  • David Corredor Velasquez
  • Konstantina Tsilimigka
Ernst & Young LLP (United States), Washington, DC
  • Barbara M. Angus

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