 Hello and welcome to this World Economic Forum discussion on reimagining the global tax system. I'm Stephen Carly, I'm a journalist at France 24 in Paris. This year, after many, many years of discussions in June, we finally had a major step forward in overhauling the way that big international companies pay tax, first the G7, then the G20 now, more than 130 countries have signed up to a new global tax deal, which will see some of the profits of the world's 100 biggest companies being reallocated to countries where they make money in effect changing, where they pay tax at the same time, there's an agreement which will create a minimum corporate tax rate of 15%. The framework drawn up at the organisation for economic cooperation and development, if implemented it will be the biggest change to global corporate tax rules in a century, but there is still hurdles to be overcome, and there are those that say this deal doesn't go far enough, particularly when it comes to emerging and developing economies. Today we're going to be talking about this deal and how it could contribute to a fairer economic recovery after the COVID-19 pandemic. For that, I'm joined by the head of the OECD, Matias Corman, Matias, thank you very much for being with us. In just a few moments we're going to be asking our participants to give us their view on this global tax deal and a poll we'll be asking our participants to vote on, but first we'd like to hear from you to set up our discussion of reimagining the global tax system. Thank you very much and thank you for inviting me to speak to your forum. Globalisation and digitalisation have revolutionised our economies and societies and they've also challenged the viability of the global tax architecture for both businesses and governments. The OECD has long been at the forefront of global efforts to tackle tax evasion, including by developing new tax transparency standards and establishing the global forum on transparency and exchange of information for tax purposes. Back in 2009, in 2013, the OECD ramped up these efforts further in response to growing public and political concerns about tax avoidance by large multinationals and the OECD G20 base erosion and profit-shifting project and its inclusive framework with now 140 members from around the world are bringing the international corporate tax rules into the 21st century. This innovative institutional framework is truly a model for effective multilateral cooperation in what is a hyper-connected world. Implementation of the BEPS action plan, which was agreed back in 2015, is well underway, but there are some reminding gaps and that is what we're seeking to address now with the international tax deal that was recently agreed by 134 out of 140 countries in the inclusive framework and by all G20 economies because the current rules still allow large multinationals to earn significant income in a market jurisdiction without paying corporate income tax there. New business models that rely heavily on intellectual property have made it easier for multinationals to shift profits to low or no-tax jurisdictions. Globalization and the digitalization of our economies has exacerbated this. As of today, 134 countries representing over 90% of global GDP have joined a statement on a two-pillar solution, which was agreed in July just a few months ago, which addresses their issues. Pillar 1 modernizes outdated rules to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest multinational enterprises. Pillar 2 provides for a globally agreed effective minimum corporate tax right, which countries can use to protect their tax basis. This minimum level of corporate taxation doesn't eliminate tax competition as it shouldn't, but it sets multilaterally agreed limitations on it. The aim is for the agreement to be finalized by October this year. Some outstanding detailed points must still be resolved and an implementation plan must also be agreed. This plan will include a model legislation, guidance and a multilateral treaty to be finalized in 2022 with implementation from 2023 onwards. It's an ambitious timeline reflecting the globally recognized urgency of addressing these issues. The two-pillar solution represents a truly historic achievement if we can finalize it. It goes beyond simply reimagining the global tax system. It remakes it, ensuring it is truly fit for purpose in the 21st century. It will bring much-needed revenue to market jurisdictions around the world because under Pillar 1, taxing rights on more than 100 billion US dollars of profit are expected to be reallocated to market jurisdictions each year and Pillar 2's global minimum tax rate of at least 15% is estimated to generate around $150 billion US in new tax revenues globally per year. These resources will help fund the recovery from the COVID crisis and could help finance other important priorities in healthcare, education, the green transition. It is important to note that developing countries make up a large part of the inclusive frameworks membership and have been very active in those negotiations. Their participation has ensured that adequate consideration was given to the administrability and implementation of the two-pillar solution. Pillar 1 rules are expressly designed so that the new right to tax applies more easily in smaller countries. Pillar 2, meanwhile, includes the subject to tax rules that will protect these countries against abuse of their tax treaties. Additionally, the agreement will stabilize the global tax system helping to avoid trade wars over unilateral measures on digital taxation that could have cost up to 1% of global GDP annually. As the world continues to grapple with the effects of the COVID pandemic, stability and certainty in our tax system are key to facilitating a robust international economic recovery. Which is why the OECD looks forward to finalizing the inclusive framework negotiations by October. We will certainly do everything we can to facilitate implementation of the agreement to ensure that the global tax system has in practice been both reimagined and remit in the best interests of society and just in closing to pick up on the point that you might in your introduction. It's going to be very important that we don't let the perfect be the enemy of the good. 80% of something is always going to be better than 100% of nothing. And if we can land this deal conclusively and have it implemented, it is a massive, massive step forward from where we are. Thank you. Okay, Matias Corman, thank you very much for those introductory remarks. Plenty to reflect on there and plenty that will get into more details with you in just a moment. But first, we'd like to bring up the poll for our participants in this event and ask them to cast their opinions on this new OECD G20 deal. The question we're asking in this poll is that the landmark agreement reached by the OECD G20 will ensure that multinationals pay their fair share of tax and that those new tax revenues will be fairly redistributed across countries. Let's if we can take a look at the poll and we'll ask you to vote now via Slido to see how you will react to that. And you can see results coming in pretty quickly. This is a live result of people as they are voting in this participant. So really that question of fairness is very key. And that point I think that you were just making is very interesting on that and we'll discuss that more with you in just a moment. But you can see as the votes come in there that there is a diverging range of opinions about this deal and how it should be implemented. And I suppose what will happen next, which is kind of one of the very interesting elements of this as well. We'll just let the last numbers there voting come in as well. Remember, this is a discussion that you can join in with your questions as well. We're accepting your questions via the chat function on this video. And if you're tweeting about this event, the hashtag to use is SDIS 21. And that will cover some of the discussions that we're looking here and we'll be we'll be taking some of your questions a little bit later as well. So if we can take a look then, I suppose at where the results of this poll are bringing us now. So this this agreement, the statement we're asking people as well to ensure that multinationals pay their fair share of tax. And of those new tax revenues will be fairly redistributed across countries. And there is a strong level of agreement, 50 percent of people agreeing with that and 13 percent strongly agreeing. And the disagreements there, 19 and 13 percent. So a fairly positive assessment of this deal from those people participating in our poll, those participants in this event, Matthias Corman, is this a fair deal? Is this giving the re the reallocation of tax and this new minimum rate? Is this creating for us a fair deal for a new global corporate tax system? Well, we obviously believe it's it's a fair deal. And, you know, it's a very significant step forward. It seeks to I mean, I've sort of addressed, you know, obviously in my opening remarks, you know, fundamentally, what this is seeking to achieve. And I mean, it's it is, you know, putting on the same around the same table. It's seeking to put around the same table. 140 countries, 134 so far are on board. It will seek a valid. It will ensure that the most successful multinational companies around the world pay their fair share of tax everywhere where they operate and generate profits. And indeed, it will also ensure that, you know, multinational companies are not able to reduce their tax liability to either very little or to zero. So I mean, it's it's a very, very significant step forward. Building on previous reforms over the last, you know, 10 to 15 years, which have significantly improved the equity and fairness of the system. You talked there about the implementation that you're her rather the finalization of the deal that you're hoping to have done as soon as October. That's very soon, given the 20th of September already. What are the final issues that are being worked out? What are those final hurdles within the negotiations that you're still working on? Well, look, I mean, there's a whole range of specifics. You know, for example, I mean, at the moment, we are talking about, you know, the global minimum tax rate of at least 15 percent. We're obviously going to have to reach a landing point there. We're going to have to reach a landing point on some of the definitions. Some of the sequencing of, you know, the implementation of this reform and other measures that are currently in place when there's a range of practical specifics that are currently being worked through. But, you know, I'm not obviously going to be able to conduct these sorts of negotiations in public. Certainly, it's just I suppose we're trying to get an idea of where the elements that are still being finalized are, so that we have a picture of where the agreement is now. Of course, when it is finally agreed at your OECD level, then it has to be approved by countries themselves as well. And we know that there's already discussions and disagreements about how it's going to be played through the U.S. Congress. Is that something that you are looking to with interest as your end of the negotiation is concluding? Well, look, when you reach an international deal, of course, I mean, that is a very important part of it. The implementation is the other very important part of the equation. And, you know, we are confident that if agreement can be reached that every country will pursue, you know, in good faith, the implementation as required through the domestic legislation. Indeed, I'm very confident that that is precisely what the U.S. is doing and will be doing. The vast majority of countries that are within the BEPS framework have signed up to this deal 134 at last count. There are some notable countries that are holding out for now. Ireland, Hungary and Estonia within the European Union. Are you hopeful that those countries will be able to sign up to this deal by October? Well, look, I mean, the conversations continue. And, you know, clearly we would like, you know, everyone ultimately to come on board. And that is that is what we're working towards. Is it important that those countries are involved? Will you just move on without them otherwise? Well, we would like to have, you know, all countries on board and we will continue to engage in that process with them as we have been. But it's not an obstacle for this for this agreement to move forward. Well, you know, obviously our preference, our very strong preference is to have everyone on board and we'll continue to work on that. Is it at the same time that you have negotiations kind of finalising, as you say, this deal at the OECD? We're also now hearing re-emerging talk from Brussels about the European Union potentially introducing its digital levy, something that had been mooted. And then, you know, discussions were suspended while the OECD talks were happening. But we've seen again mentions in recent weeks from European Commissioners that they will be pressing ahead with their digital levy. Is that something that you see is compatible with the OECD deal? Well, I mean, the European Union, you know, made a very important decision, which did help facilitate, you know, the conclusion of the agreement at the EG20 Finance Minister's meeting in Venice at that point, not to proceed with what was on the table in terms of a digital services levy at that point in time. I know that the European Union is extremely committed for this international tax deal to be successful and to be successfully concluded and successfully implemented. And I'm very confident that whatever measures the European Union decides to pursue in the future, that will be consistent, you know, with that desire for this to be successfully concluded. As you come towards that landing zone on those last few remaining issues, is there an opportunity down the line for the agreement to be tweaked? Maybe the reallocation formulas, maybe that issue around where the wherever the minimum tax lies. Is this going to be kind of a forever perennial deal until, you know, ever many decades it could take us to negotiate a new one? Or will there be opportunities and potential for those measures to be tweaked as a living agreement? Well, look, I mean, obviously, the broad parameters of this deal, you know, have been discussed for some time now and are designed to provide certainty for some time to come. But by the same token, when there are some, I mean, there is actually a review mechanism enshrined in the agreement that was negotiated a few months ago. And I mean, that, you know, after a period of, you know, after a certain period, there will be a negotiation of aspects or a re-discussion or reconsideration, a review of aspects of this. And, you know, ultimately, everything can be re-discussed. But, you know, this is an agreement that involves 140 countries around the world through the inclusive framework. And, you know, the fundamental features of this, you know, are designed to provide certainty and stability over the long term. I mean, this is not something that, you know, in terms of the fundamental principles that will be reassessed, you know, on a regular basis. One of the questions that I'm just reminding our viewers that they can send in also questions if they want to join us in this discussion, but we've already had one from one of our viewers today who's asking that HQ countries, so countries where the headquarters of big international companies are based, which are mainly OECD members, will be receiving revenues from a minimum tax. And the question here is, will that create an obstacle to any future less unjust reform if the HQ countries are going to be benefiting from this new tax arrangement? Well, I'm not quite sure what the question is here. I mean, what we're seeking to prevent here is the capacity for, you know, multinational companies to reduce their tax liability to either, you know, very low or nothing. And, you know, we are seeking to set a floor to the level, I mean, to tax competition. We're not seeking to abolish tax competition. We're saying that the minimum level of corporate taxation or tax that should be paid on corporate profits globally, you know, on profits outside your home jurisdiction should be at least 15%. And the agreement would seek to give effect to that. You know, I think that that creates a level of playing field that is globally fair. So I'm not quite sure that I understand the question. Okay, do you feel that this deal could pave the way for other kinds of big international tax arrangements? We know there's a proposal from the IMF for a solidarity tax, for example, you've spoken about carbon pricing, this may that could be done through a global deal as well. Could this be a template to allow further deals of its kind to be done in the future? Well, I certainly think that, you know, in relation to challenges that are generally global and multinational tax avoidance, the implications of the combined effects of digitalization and globalization on equity and fairness in our tax system, I mean, is a truly global challenge. And I mean, you mentioned carbon pricing, certainly in order to effectively address climate change, we also need a globally coordinated, effective solution. And we need a globally coordinated approach that minimizes to the greatest extent possible the competitiveness and carbon leakage implications in which maintains a global level of playing field at the same time as increasing the level of ambition and effort when it comes to reducing global emissions. And so I do believe that there is a case to use this inclusive framework or to consider using this inclusive framework type mechanism to assess how we can best find an effective approach globally to price carbon. And that is by considering both the explicit carbon pricing approaches as well as the implicit carbon pricing approaches. I mean, with climate change and with measures to reduce emissions, one of the issues that different parts of the world for good reasons are pursuing different policy mixes. How do you come up with a methodology, a globally coordinated methodology that recognizes each other's effort in a way that has integrity? And that is still, that is genuinely focused on achieving a common global objective. And do you feel there's an appetite for that from your members in the OECD and broader as well to build that sort of inclusive framework for that area? Well, I believe that there is, I mean, I believe that there's a growing appetite around the world to get to global net zero emissions by 2050. I mean, that is a commitment that is increasingly shared by many countries all around the world, which is great. But I mean, the focus now has to be on how we can reach that outcome and how we can ensure that every country in every part of the world carries a genuine part of the burden, a genuine and very fiber part of the burden. And now, you know, how we best do that, I think is still an ongoing conversation. And there is, as I said, there's different ways of going about it in different parts of the world. And we've got to find a way to bring that all on to one page into one overall globally coordinated approach. And I mean, I'm certainly suggesting that an inclusive framework type approach could be an approach to consider, given it has been successful in achieving what seemed pretty impossible a few years ago, a deal on international tax reform. We, of course, the overall theme of this event is sustainable development. And I'm keen to get your view as well on the debt issue that a lot of emerging economies are facing now, growing debt, growing servicing costs as well. And what sort of additional measures do you think that could be put in place to support those economies, aside from what we're talking about in this global tax deal? Well, look, I mean, the IMF and the World Bank are leading that work internationally. The OECD focus here is on providing various transparency measures in order to help provide proper data and proper information that helps inform the conversation on these sorts of issues. But I mean, in the end, developed economies have got to continue to step up and providing the appropriate levels of support to developing economies around the world. You've talked about this, you know, finalizing the agreement in October. When do you think we may see implementation? Do you have a kind of a sketch timetable in your mind of when we could see this global tax deal in force? Yeah, so as I mentioned in my opening remarks, the objective is for this to be implemented from 2023 onwards. So final deal, hopefully, formalized by the end of October, the G20 leader summit in the context of the G20 leader summit, and then practical implementation work all throughout 2022 with a practical implementation starting from 2023 onwards. And how would you be monitoring implementation? Will you be able to provide an update down the line to tell us how the deal is working and how much tax has been either raised by it or reallocated? Well, we will certainly be providing updates on the implementation along the way for sure. OK, Matias Corman from the OECD. Thank you very much for joining us for this session. Thank you to you for watching and for sending your questions. You can share your reflections on the topic of the global tax system using the hashtag sdis21 on social media or via top link as well. Plenty more going to happen in this space in the coming months as we've been hearing from Matias Corman from the OECD. Very, very soon, deadlines coming up in terms of finalizing that deal and moving on with it. So we have plenty more I'm sure to be discussing about tax in the next few months. Thank you again for joining us and stay tuned to the Sustainable Development Impact Summit.