In October 2021, 136 member countries of the OECD/G-20 Inclusive Framework, including Chile, committed to making the largest modification to the international tax system since its creation. Its objective is to face the multiple challenges posed by globalization and digitalization of the economy, understanding the so-called two-pillar solution.

The Pillar Two of the agreement aims to establish a minimum base for tax competition, through the incorporation of a global minimum corporate rate of 15%. In a first stage, it will be applicable to multinational companies whose consolidated income exceeds 750 million euros.

To ensure effective compliance with this measure, the agreement involves the incorporation of rules in domestic legislation and tax agreements that allow countries of residence or source to tax in the event that a country does not comply with the global minimum rate.

Last September, negotiations to adopt an international framework that allows the application of the Pillar Two finally concluded with the “Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule” which must be signed by the participating countries of the OECD/G-20 Inclusive Framework.

This instrument establishes a STTR, which will enable developing countries to tax certain intra-group cross-border payments, in cases in which these payments are subject to taxation under a rate less than 9%. In this way, through the STTR, revenue source jurisdictions will be able to impose a tax when they would not otherwise be able to do so under the provisions established in the various international tax conventions.

Therefore, over 70 members of the Inclusive Framework would be authorized to request the inclusion of the STTR in the agreements they maintain with other member states of the Framework, including Chile.

The OECD will be the depositary of this Convention and will provide support to the different governments in the signing and ratification process.