OECD Global Tax Reform: IASB Amendments

In a historic move, IASB proposes urgent amendments to the SMEs Accounting Standard, in response to the OECD's Pillar Two model rules. The aim is to aid SMEs affected by international tax reform, aligning with the amendments to IAS 12, while ensuring financial transparency.

OECD's Global Tax Reform: IASB Amendments
EU International Tax Reform

IASB Amendments: IFRS for SMEs Accounting Standard in Response to International Tax Reform

Source: The International Financial Reporting Standards Foundation Keywords IASB international tax reform

The International Accounting Standards Board (IASB) has proposed urgent amendments to the IFRS for SMEs Accounting Standard to help small and medium-sized entities (SMEs) adapt to international tax reform. This marks the first time the IASB has proposed changes to the Standard outside its regular review cycle. The suggested amendments to the income tax section of the Standard would offer the same relief as the amendments to IAS 12 Income Taxes issued in May 2023. These changes come in response to the Organisation for Economic Cooperation and Development's (OECD) Pillar Two model rules, aimed at ensuring large multinational companies are subject to a minimum 15% tax rate. Over 135 countries and jurisdictions representing more than 90% of global GDP have agreed to the Pillar Two model rules. The proposed amendments aim to provide timely relief for affected SMEs while ensuring the best possible information is available through financial statements.




SMEs and International Tax Reform: IASB amendments implications


The proposed amendments to the IFRS for SMEs Accounting Standard could have several implications for the future, they may provide much-needed relief to SMEs affected by international tax reform, helping them adapt more easily to new regulations. This relief could potentially support the financial stability of SMEs and help them maintain their competitiveness in the global market.

These amendments could increase transparency and improve the quality of financial reporting for SMEs. By introducing targeted disclosure requirements and clarifying the disclosure objective for income tax, the proposed changes aim to ensure that the users of financial statements have access to the best possible information. This increased transparency could help SMEs attract investors and achieve better access to financing opportunities.

The IASB's decision to propose urgent amendments outside of its periodic review may set a precedent for future changes to accounting standards. This could lead to more responsive and timely updates to standards, ensuring that they remain relevant and effective in a rapidly changing business environment.

The widespread adoption of the OECD's Pillar Two model rules and the proposed amendments to the IFRS for SMEs Accounting Standard may contribute to a more level playing field for businesses across the globe. This could potentially reduce tax avoidance strategies and promote fair competition, ultimately benefiting the global economy.




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IFRS - IASB consults on proposed amendments to IFRS for SMEs Accounting Standard related to international tax reform




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