US, Turkey agree on transition to multilateral OECD-G20 framework

By Ovunc Kutlu

ANKARA (AA) - The US and Turkey announced Monday an agreement on the transition from existing Digital Services Tax to a new multilateral solution agreed by the OECD-G20 inclusive framework.

The move comes amid the historic agreement that was reached last month between 137 countries of the OECD-G20 inclusive framework, which represents nearly 95% of the world’s GDP, on a two-pillar package of reforms to the international tax framework to be implemented in 2023.

"These reforms will provide for a tax framework that is fairer, more stable, and better equipped to meet the needs of a 21st century global economy," the US Treasury Department said in a statement.

"This compromise represents a pragmatic solution that helps ensure that countries can focus their collective efforts on the successful implementation of the OECD/G20 Inclusive Framework’s historic agreement on a new multilateral tax regime and allows for the termination of trade measures adopted in response to the Turkish Digital Services Tax," it added.

The US and Turkey on Oct. 8 joined 134 other members of the OECD-G20 inclusive framework, which includes Austria, France, Italy, Spain, and the UK, in reaching a political agreement on the statement on a two-pillar solution to address the tax challenges arising from the digitalization of the economy.