GFIA welcomes UK progress on OECD tax rules, but highlights need to align implementation with other tax jurisdictions

3 October 2022

GFIA has published its response to a UK consultation regarding its ongoing commitment to the OECD’s two-pillar initiative in relation to the tax challenges of digitalisation (Pillar 2). GFIA welcomes the UK’s broad commitment to these initiatives in accordance with the Inclusive Framework agreement reached in October 2021.

Several other major economies, including both the US and EU, have, however, struggled to move as quickly as the UK in putting legislative processes in place. Furthermore, it is likely that most major markets will not be able to implement Pillar 2 legislation in line with the Inclusive Framework’s originally anticipated timeline. This leads to uncertainty for in-scope groups, such as insurers, as well as increasing compliance costs and concerns over potential double taxation issues.

GFIA calls on the UK Government to announce that it does not intend to implement the Pillar 2 rules before other comparable jurisdictions. GFIA also calls for a further delay in the implementation of these rules until further international agreement is obtained, a common approach becomes clear and the timeline for adoption of these rules is feasible.

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