Your most-asked questions about BEPS

To help in addressing the latest developments related to BEPS Pillar One and Pillar Two, KPMG International professionals from Global Tax & Legal have hosted a number of webcasts to address the path ahead. Most recently, 'The path ahead for BEPS Pillar 1 and Pillar 2 implementation,' which provided an in-depth discussion on the OECD’s 20 December 2021 report, as well as 'The next chapter for BEPS Pillar 2 and the possible implications for multinationals,' which provided insights into the commentary release of 14 March 2022 on the Pillar 2 model rules.

As a topic of utmost interest to multinational organizations globally, this video series answers some of your most asked questions on BEPS in relation to tax policy from both regional and global perspectives. Grant Wardell-Johnson, Global Tax Policy Leader and Chair of the Global Tax Policy Leadership Group, KPMG International, sat down with Manal Corwin, Americas Regional Tax Policy Leader, KPMG in the U.S., and Vinod Kalloe, EMA Regional Tax Policy Leader, KPMG in the Netherlands, to discuss.

Send your questions to tax@kpmg.com. 

1. When looking at Pillar One and Pillar Two more broadly, what would you like to draw out? (1:35)
   
2. How is the US reaction to this project going to pan out - are the mid-term elections going to make a difference in relation to this? (3:00)
3. Can EU countries go it alone, or must they have a directive that brings all the EU countries into the fold? (4:42)
4. Where are the Economic and Financial Affairs Council negotiations at in relation to getting a directive? (6:14)
5. Has Pillar Two just changed a zero percent base to a 15 percent base? (7:03)
6. At the time of recording, we now have an environment where countries may introduce Pillar Two at different times - what do you think is the main problem in not having countries go together in relation to this? (8:40)

1. What role does deferred tax play in relation to the Model Rules under Pillar Two? (0:45)
2. What is the difference between a domestic IIR and a qualifying domestic minimum tax? (01:50)
3. In relation to the CFC regime, can you have a domestic tax, where you fall below the 15 percent ETR in relation to your own jurisdiction, but not a foreign jurisdiction? (3:40) 
4. How does the GloBE income effect the impairment test - does the impairment actually reduce GloBE income, or is it ignored (4:20)
5. If a jurisdiction or company in a jurisdiction earns only related party income, how does Pillar Two and GloBE income impact them? (4:37)
6. How are free-trade zones impacted by the GloBE rules? (5:09)
7. What sectors are being excluded from Pillar One and what sectors are being excluded from Pillar Two? (6:54)

1. What phases are companies in, in relation to the introduction of Pillar One and Pillar Two? (0:48)
2. How does country-by country reporting relate to safe harbors? (3:16)
3. How do we think governments will react in relation to Pillar Two? (3:58)
4. What will happen if Pillar One fails? (7:45)
5. What are the US trade rules? (9:41)