We could be in the midst of the biggest change to the way multinational companies are taxed in decades. For the past year, over 130 developed and developing countries have been trying to agree on how to ‘go beyond’ some of the fundamental principles that have underpinned cooperation on corporate taxation for a century. In January 2019, they opened negotiations to redistribute ‘taxing rights’ over multinational businesses among themselves, a matter previously thought too complex to discuss in a multilateral setting. Their reason for doing so was the challenge of taxing digitalised business models effectively. This paper describes the proposals as they stand, and highlights some of the issues for developing countries. It draws on discussions with developing country negotiators and other participants in the IF discussions between July 2019 and January 2020, as well as their published comments.
