Large fiscal spending during the pandemic period has amplified the urgency to reduce tax leakages arising from profit shifting practices by multinational enterprises. Recent months have seen an acceleration in global momentum toward the adoption of a more stable and fairer international tax framework. As of August 31, 2021, 134 economies have agreed to adopt the proposed two-pillar solution. While unprecedented milestones have been reached in recent months, there are still many uncertainties and challenges to be addressed.

This note explains the main areas of the initiatives introduced under the proposed global tax reform, highlights key issues that remain to be resolved, and outlines the implications of the reforms for ASEAN+3 member economies.