OECD INCLUDES SHIPPING ANCILLARY SERVICES IN GLOBAL CORPORATE TAX
On 20 December 2021, the OECD released its Pillar Two model rules, also referred to as the “Anti Global Base Erosion”. These rules seek to enforce a minimum 15% effective tax rate on profits earned by large multinational enterprises in each jurisdiction where they realise profits. The minimum tax will apply to multinational enterprises with revenue above EUR 750 million and is estimated to generate around USD 150 billion in additional global tax revenues annually.
While the model rules on the implementation of the global tax exclude international shipping income from the scope of BEPS Pillar Two, the definition of shipping income does not include income from inland transport, logistics and forwarding. CLECAT welcomes the new definition. Inclusion of these land transport services would have brought further distortions in the maritime logistics supply chain CLECAT and FIATA issued a press release in July 2021 to call on OECD countries to include logistics services in the scope of the global minimum tax.
The entry into force of the global minimum corporate tax is expected for 2023. The OECD will conduct a public consultation in February to address particular issues with regards to administration and compliance which need to be agreed before the end of the year. Additionally, the European Commission adopted on 22 December a proposal for a Council Directive to implement the minimum corporate income tax in the European Union. The proposal will need to be adopted unanimously in the Council to become EU law.