G20 New Delhi Declaration: Leaders Commit To Pursue Fair, Sustainable, Modern Tax System

G20 Summit 2023: The leaders have recognised the need for coordinated efforts towards capacity building to implement the two-pillar international tax package effectively

the G20 leaders have asked the Global Forum on Transparency and Exchange of Information for Tax Purposes to identify an appropriate and coordinated timeline to commence exchanges by relevant jurisdictions

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The G20 New Delhi Leaders' Declaration on Saturday reaffirmed their commitment to pursue cooperation towards a globally fair, sustainable, and modern international tax system appropriate to the needs of the 21^st century. At the two-day global summit in New Delhi on Saturday, the world leaders said that they remain committed to the swift implementation of the two-pillar international tax package.

As of now, according to the declaration, significant progress has been made on Pillar One, including the delivery of a text of a Multilateral Convention (MLC), and work on Amount B (framework for simplified and streamlined application of the arm’s length principle to in-country baseline marketing and distribution activities) as well as the completion of the work on the development of the Subject to Tax Rule (STTR) under Pillar Two.

“We call on the Inclusive Framework to resolve swiftly the few pending issues relating to the MLC with a view to preparing the MLC for signature in the second half of 2023 and completing the work on Amount B by the end of 2023. We welcome the steps taken by various countries to implement the Global Anti-Base Erosion (GloBE) Rules as a common approach,” the leaders have reportedly agreed.

“We recognise the need for coordinated efforts towards capacity building to implement the two-pillar international tax package effectively and, in particular, welcome a plan for additional support and technical assistance for developing countries. We note the 2023 update of the G20/OECD Road map on Developing Countries and International Taxation. We call for the swift implementation of the CryptoAsset Reporting Framework and amendments to the CRS,” the statement stated.

According to the declaration, the G20 leaders have asked the Global Forum on Transparency and Exchange of Information for Tax Purposes to identify an appropriate and coordinated timeline to commence exchanges by relevant jurisdictions, noting the aspiration of a significant number of these jurisdictions to start CARF exchanges by 2027 and to report to our future meetings on the progress of its work. “We note the OECD Report on Enhancing International Tax Transparency on Real Estate and the Global Forum Report on Facilitating the Use of Tax-Treaty-Exchanged Information for Non-Tax Purposes,” the statement noted.