For who is BEPS Pillar 2 relevant and why?
BEPS Pillar 2 is relevant for multinational companies and governments around the world.
For multinational companies, Pillar 2 has the potential to significantly impact their tax planning strategies and compliance obligations. If the proposal is implemented, companies will need to ensure that they are paying a minimum level of tax on their income, regardless of where it is earned. This could involve changes to their legal and financial structures, as well as additional compliance requirements.
For governments, Pillar 2 is seen as an important tool to address the issue of tax base erosion and profit shifting, which can result in significant revenue losses. By implementing a minimum tax rate on income earned in low-tax jurisdictions and denying tax deductions for certain payments made to related parties in those jurisdictions, governments hope to increase their tax revenue and prevent companies from avoiding their tax obligations.
Pillar 2 is also relevant for taxpayers and society as a whole. By ensuring that companies pay their fair share of taxes, governments can fund public services and investments that benefit society, such as healthcare, education, and infrastructure.
Overall, BEPS Pillar 2 is a significant development in international tax policy that has the potential to impact a wide range of stakeholders, including multinational companies, governments, taxpayers, and society as a whole.