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BEPS 2.0

Tax challenges arising from the digitalisation of the economy

Prepared for the next phase of BEPS?

The OECD’s Base Erosion and Profit Shifting Project (BEPS) aims to secure and sustain the international tax system and increase tax equity among traditional and digital businesses. Whatever the outcomes of the programme and the concrete proposals on the reallocation of taxing rights and global anti-base erosion, international businesses in all industries are likely to be affected. Are you prepared?

OECD BEPS Action Plan

The 15 actions developed in connection with the OECD/G20 BEPS Project could have far-reaching implications for just about every area of your business. Our matrix of practical guidance and support will help you see where you stand and negotiate the potential minefield.




The OECD Programme of Work on the Tax Challenges Arising from the Digitalisation of the Economy

What is it and why does it affect not only digital companies but all industries?

The digitalisation of the economy has social and economic impacts in many areas, including taxation and, in particular, the current international tax system. This system was designed in an era when companies provided services and goods mainly through physical presence locally or internationally. With the emergence of purely digital companies and subsequent digitalisation of goods and services companies alike, it has been widely recognised that the current international tax system is no longer fit for purpose.

In order to adapt existing tax systems, members of the OECD/G20 Inclusive Framework on BEPS are looking at a comprehensive, consensus-based solution to what has been considered the two main challenges arising from the digitalisation of the economy.

  • First, as digitalisation allows businesses to operate without a physical presence, the existing nexus-based system that allocates taxation rights among countries based on physical presence is no longer considered effective.
  • Second, new technologies are thought to facilitate tax avoidance through the shifting of profits from high tax to no or low tax jurisdictions.

The OECD IF considers that addressing these challenges through a coordinated international response is key to maintaining a functioning international tax system and avoiding unilateral measures by individual countries.

Read more on our blog here.


What is the timeline?

Pillar 1: Reallocation of taxation rights – what does it mean and what is the impact on your business?

The OECD IF is undertaking work under a Pillar 1 approach and will:

  • analyse issues around the physical presence of a business
  • look at the question of what will be taxed and where
  • aim to determine the allocation of profits to countries where users/customers are located.
  • introduce a fixed minimum return for baseline marketing and distribution activities with a wide scope of applicability.

For more information about Pillar 1, please refer to our blog section.

Pillar 2: Global Anti-Base Erosion (GloBE) proposal

The work that the OECD IF is undertaking under a Pillar 1 approach would be based on a set of four rules:

  • an income inclusion rule that would subject foreign income to a minimum tax
  • an undertaxed payment rule that would deny deductions or introduce source-based taxation under certain conditions
  • a switchover rule from exemption to credit method under certain circumstances
  • a subject-to-tax rule that would complement the undertaxed payment rule in certain cases.

For more information about Pillar 2, please refer to our blog section.


How to prepare?

Impact Simulation & Analysis

With the help of our proprietary PwC technology tools & dashboards you can simulate Pillar 1 & 2 impact and analyse the potential impact on your organisation. Contact us for more information and guidance on how our tools & advice can help prepare you for BEPS 2.0 reality. 

  • Simulate the potential impact of Pillar 1 (Amount A and Amount B) using various parameters
  • Quantify potential impact from a profit reallocation and effective tax rate perspective
  • Verify which group jurisdictions or entities are likely to be most affected by the new proposals
  • Prepare multiple scenarios and evaluate potential need to act or prepare
  • Explore potential impact of Pillar 2

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Our articles on BEPS 2.0

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Recordings of past webcasts

Webcast: OECD Digitalisation Announcement

The OECD, Inclusive Framework and G20 are expected to release documents in the first half of October that set out the consensus and additional views on Pillar 1 and Pillar 2 in the project framework previously announced. Pillar 1 looks at the attribution of revenues to market jurisdictions. Pillar 2 deals with the imposition of a minimum tax. The documents will provide details of the provisions agreed by the Inclusive Framework of 140 countries together with additional comments from the Secretariat and G20 which mandated the project.

Please register below to join our OECD digitalisation announcement discussion.

Request webcast recording

Webcast: How will the G7 commitment to Pillars 1 and 2 impact your business? 

In this webcast it was discussed how the G7 Finance Ministers’ agreement might affect your business.

On 5 June, the G7 Finance Ministers announced an agreement in which participating countries committed to new taxing rights that would allow countries to reallocate some portion of profits of large multinational companies to markets, as well as enact a global minimum tax rate of at least 15%.

Watch our webinar to find out.

Request webinar recording

Get in touch with our experts

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Contact us

Dominik Birrer

Partner Tax, Luzern, PwC Switzerland

+41 58 792 43 22

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David McDonald

Partner and Leader FSTP PwC Europe, Zurich, PwC Switzerland

+41 75 413 19 10

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Armin Marti

Partner and Leader Tax Policy, Zurich, PwC Switzerland

+41 58 792 43 43

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Markus Prinzen

Partner and Leader Corporate Tax Services, Zurich, PwC Switzerland

+41 58 792 53 10

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Jim Matthews

Partner, Transfer Pricing and Value Chain Transformation, Geneva, PwC Switzerland

+41 58 792 95 60

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Rolf Röllin

Director - Corporate Tax, Zug, PwC Switzerland

+41 58 792 68 90

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Jacob Parma

Director - Transfer Pricing & Value Chain Transformation, Zurich, PwC Switzerland

+41 58 792 44 87

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Raphaël Matthys

Director, Corporate Tax, Zurich, PwC Switzerland

+41 58 792 9346

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Christa Elsaesser

Director International Tax, Zurich, PwC Switzerland

+41 58 792 42 66

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Etienne Michaud

Manager - Transfer Pricing and Value Chain Transformation, Geneva, PwC Switzerland

+41 58 792 96 70

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