Markets Wired

1. On October 8, 2021, the United States and Türkiye joined 134 other members of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (including Austria, France, Italy, Spain, and the United Kingdom) (the “Inclusive Framework”) in reaching political consensus on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.
2. On October 21, 2021, the United States, Austria, France, Italy, Spain, and the United Kingdom reached a political compromise on a transitional approach to existing Unilateral Measures while implementing Pillar 1 (“Unilateral Measures Compromise”).  The Unilateral Measures Compromise is reflected in the joint statement that was issued by those six countries on that date (the “October 21 Joint Statement”).
3. On November 22, 2021, the United States and Türkiye decided that the same terms that apply under the Unilateral Measures Compromise would apply as between the United States and Türkiye with respect to Türkiye’s Digital Service Tax and the United States’ trade actions regarding the Digital Service Tax (the “November 22 Joint Statement”).  Accordingly, the Unilateral Measures Compromise described in the October 21 Joint Statement was incorporated by reference into the November 22 Joint Statement between the United States and Türkiye.  The United States and Türkiye committed to remain in close contact to ensure that there is a common understanding of the respective commitments under the November 22 Joint Statement and endeavor to resolve any further differences of views through constructive dialogue.
4. On December 18, 2023, the Inclusive Framework issued a statement calling for a finalization of the text of the Pillar 1 multilateral convention by the end of March 2024 with a view to holding a signing ceremony by the end of June 2024.
5. On February 15, 2024, the United States, Austria, France, Italy, Spain, and the United Kingdom decided to extend the political compromise set forth in the October 21 Joint Statement until June 30, 2024.  That decision is reflected in the joint statement (the “Updated October 21 Joint Statement”) that was issued by those six countries on February 15, 2024.
6. In light of the revised timeline for adoption and signature of the Pillar 1 MLC, the United States and Türkiye have decided that the same terms that apply under the Updated October 21 Joint Statement apply to this updated joint statement (hereinafter “Updated November 22 Joint Statement”).  Accordingly, this Updated November 22 Joint Statement incorporates the provisions of the October 21 Joint Statement and the changes to the terms of the October 21 Joint Statement described in the Updated October 21 Joint Statement.  As with the November 22 Joint Statement, this Updated November 22 Joint Statement reflects the political understandings of the United States and Türkiye, which intend to implement it accordingly.

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