OECD publishes treaty that would replace national digital taxes

The Organisation for Economic Cooperation and Development (OECD) published a multilateral treaty on Wednesday that would replace a hodge-podge of national digital services taxes if ratified by enough countries.
The release of the text puts pressure on the United States in particular, where a two-thirds majority in the deeply divided Senate is needed to ratify treaties.
The document is the first pillar of a two pillar overhaul of rules for the cross-border taxation of multinational companies, which was agreed in 2021 by nearly 140 countries but whose implementation is proving slow and complicated.
Many countries complain the world’s fragmented tax system allows multinational companies – particularly major U.S. tech firms – to pay little tax in jurisdictions where they make large revenues, and so some have introduced their own digital taxes, despite opposition from Washington.
The treaty codifies how governments are to reallocate taxing rights on about US$200 billion in profits from the biggest and most profitable multinationals to the countries where their sales occur.