Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will confirm that Pillar 2 of the OECD Framework on Base Erosion and Profit Shifting will not become operational in the UK in the event that international agreement is not reached on implementing Pillar 1.
The Government is glad that on 8 October 2021 more than 130 countries reached agreement on a Two-Pillar Solution to the tax challenges arising from the digitalisation of the economy.
As per the detailed implementation plan set out in the October 2021 statement, the aim is that both Pillar 1 and Pillar 2 will be implemented and effective by 2023. However, we cannot comment on the Organisation for Economic Co-operation and Development’s funding requirements in this respect.
As part of the implementation process, both Pillars will be subject to the standard tax policymaking process, with their impacts formally assessed through the Office for Budget Responsibility’s forecast process.
Monitoring and compliance will be handled by HMRC, utilising their departmental budget allocated as part of the Spending Review 2021.