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ICC has welcomed the decision taken by G20 Finance Minister’s to endorse the preliminary agreement by the OECD Inclusive Framework to modernize the global taxation system — but cautions that coordinated implementation of the agreement will be vital to avoid placing unnecessary burdens on cross-border trade and investment. 

ICC Secretary General John W.H. Denton AO said: “The fundamental architecture and parameters of the agreement reached through the OECD set a solid foundation to modernize the global taxation system. The G20’s backing for the framework today is an important step towards maintaining the integrity of the international tax system — and avoiding a proliferation of unilateral tax measures that undermine consistency internationally, create risks of double taxation and could rapidly place a significant drag on any post-pandemic recovery. 

“What we now need to see from the G20 — is a clear political commitment to implement the OECD framework in a coordinated and consistent manner. Further clarity on co-ordination between application of the new rules and removal of digital services taxes would be a good place to start in this regard. 

“Cooperation on the application of the new rules — especially on the reallocation of profits — will be vital to avoid unnecessary disputes and frictions to cross-border trade and investment. Allied with this, there remains a clear need to have a strong process for arbitration and dispute resolution built into the final framework to mitigate the risk of a damaging proliferation of double taxation disputes.” 

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