OECD Secretary-General Mathias Cormann opened the 18th meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) in Paris, France.
Check against delivery.
Co-Chairs, Manal, dear members of the Inclusive Framework,
A very warm welcome to the OECD, and to this 18th meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
A special welcome to Guatemala, which joined in January as our 148th member.
Ten years ago, in Kyoto, 82 countries and jurisdictions came together for the first meeting of this Inclusive Framework.
Today you are 148, working on an equal footing.
This Inclusive Framework is one of the most tangible examples of successful multilateral cooperation anywhere in the world.
But what matters most is what you have delivered.
You replaced gaps and mismatches in the international tax rules with common standards.
You brought transparency where there was none.
And you put in place a global minimum tax on the profits of the largest multinational enterprises (MNEs).
The evidence of impact is clear.
Profits are now better aligned with real economic activity. The ratio of profits to employees in MNE operations in investment hubs has fallen by 27%.
The sensitivity of where profits are booked to tax rates has declined by up to 40% compared with pre-2015 estimates.
And after two decades of decline, statutory corporate tax rates have stabilised.
This year, you delivered again.
The side-by-side package you agreed in January secures the global minimum tax.
It shows that multilateral cooperation can reinforce sovereignty, deliver certainty and support growth and fiscal sustainability, all at the same time.
Around 65 jurisdictions have now implemented global minimum tax rules. Together with the side-by-side arrangement, more than 90% of in-scope MNEs are covered.
Our July economic impact assessment finds that the global minimum tax is set to cut profit shifting by between a quarter and almost a half, and to lift global corporate tax revenues by 3 to 5% a year, with no significant adverse effect on investment or employment in its first year.
That is a remarkable record. It is not a reason to pause.
Public finances are under growing pressure. Public debt as a share of GDP is higher today than before the global financial crisis in every G20 country except two. And global growth is expected to slow to 2.9% this year.
In this environment, well-designed tax systems matter more than ever: to raise revenue efficiently, to support investment and growth, and to sustain public trust.
That is where this Inclusive Framework comes in. Let me suggest three priorities for the days ahead.
First, make sure every member benefits from what you have built.
You have simplified the peer reviews of the BEPS minimum standards, you are improving developing countries’ access to Country-by-Country (CbC) reports, and you have strengthened every member’s voice through regional engagement and a better-defined role for the Steering Group.
The focus now is implementation: of the minimum standards, of Amount B and of the Subject to Tax Rule (STTR) multilateral instrument.
The OECD stands ready to help. Across our tax programmes we have trained close to 150 000 officials, and we want to reach more, in more countries, on the issues that matter most to you. Tomorrow’s session on domestic resource mobilisation (DRM), with our partners from the International Monetary Fund (IMF), the World Bank and the United Nations (UN), is your chance to tell us where support is needed most.
Second, keep tax systems fit for a changing world.
This week you will take forward two new workstreams: the tax challenges of the global mobility of workers, with a workplan for your approval; and the interactions between tax, inequality and growth, under a phased, evidence-based approach.
Our report to G20 Finance Ministers this month shows how corporate tax design shapes business dynamism: tax certainty, well-targeted incentives and lower compliance costs all help new and growing firms to invest and create jobs.
You will also exchange experience on how AI can make tax administration more efficient and taxpayer services better, safely and reliably; and on how tax policy should respond to demographic shifts, from ageing populations to large youth cohorts.
Third, a constructive path forward on the tax challenges arising from the digitalisation of the economy.
You have already invested a great deal in this work, from the International Value Added Tax and Goods and Services Tax (VAT/GST) Guidelines to the phased implementation of Amount B.
Tomorrow, you will reset that conversation: starting from the evidence on how the digital economy has actually evolved, building a shared understanding of where the challenges lie, and only then discussing priorities and next steps.
Consensus will not come easily. But the question is not whether to keep talking. The question is how we can best ensure that whatever comes next prevents fragmentation, protects tax bases and gives governments and businesses the certainty they need.
The constructive dialogue you reaffirmed at your last plenary is the right way to find that answer.
In closing.
Over ten years, you have rarely started from the same position. That is the reality of 148 members at very different stages of development.
But you have shown, again and again, that different perspectives need not prevent progress. Handled well, they produce better and more durable solutions.
This week is an opportunity to do that again: to build on what you have achieved, and to decide where you go next.
The OECD will support you every step of the way.
My very best wishes for a positive, productive and successful meeting.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.