TAX. Creation of a new Framework for an international taxation reform by the OECD July 7, 2021

On July 1st, 2021, the Organization for Economic Co-operation and Development (OECD) announced the creation of a new Framework for an international taxation reform in which Two-Pillar are established that will address to transform international fiscal regulations and tax the operations of Multinational Enterprises (MNEs)[1] so that they pay a percentage of taxes wherever they carry out their activities, even if it is not their country of origin or incorporation.


Derived from the complexities caused by the digitalized economy and its effects on this sector, the OECD, and the countries of the Group of Twenty (G20)[2] have made efforts in recent years to create tax planning policies and strategies in order to counteract these obstacles. Primarily, new technologies have given rise to tax avoidance practices as it is common for MNEs to establish themselves in jurisdictions with exceptionally low tax burdens or in jurisdictions where the tax burden is zero, that is, in jurisdictions where income is subject to preferential tax regimes.

Therefore, 131 countries and jurisdictions (including Mexico) coordinated efforts to establish fundamental Two-Pillar that address a tax reform regulation in their international sphere and ensure that MNEs pay equitably and fairly the taxes that correspond to them derived from their activities and operations, regardless of where they are carried out.

In this sense, the Two-Pillar propose the following:

  • The reallocation of tax rights, which would have the purpose of redistributing the tax rights of large MNEs from their countries of origin to the market jurisdictions where they effectively carry out their economic activities and obtain their income, regardless of whether they have a physical presence or not.
  • A global mechanism in order to counteract the erosion practices of the tax base and transfer of benefits, which would consist in the introduction or establishment of a global minimum corporate tax rate of 15% in order that the countries achieve to protect their taxable or tax basis.

It is estimated that the technical work will conclude in October 2021 and the Two-Pillars will be implemented in 2023.


The creation of this Framework for an international tax reform through the establishment of the aforementioned Two-Pillar will result in a new tax scheme applicable to MNEs, for which most of taxpayers classified as “Large Taxpayers” in Mexican territory must be in constant monitoring of the evolution of the agreements reached by the countries that are participating in the creation of this new Framework, as well as the legislative changes that are subsequently made in our legal system.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

[1] Multinational Enterprises are those that operate or carry out activities in more than one country, so they have subsidiaries or branches in different places, but they centralize their management center in a single headquarters, normally located in their country of origin.

[2] It is the main forum for macroeconomic policy coordination among the twenty largest world economies.

Mexico City, July 7, 2021

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