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OECD Profit Reallocation Rules Will Drop Transaction Approach

June 27, 2022, 7:56 PM

The global tax deal will drop a proposal calling for companies to track each transaction, as part of identifying the market to which they should reallocate their profits, an OECD official said Monday.

The 2021 global tax deal’s “Amount A"—under Pillar One—calls for a portion of the largest multinationals’ profits to be reallocated, for taxation by the jurisdictions where their customers are located. The Organization for Economic Cooperation and Development in February released for public input draft rules on revenue sourcing, explaining how companies should determine the end market by tracking each transaction.

The paper raised concerns from businesses arguing ...