Pillar 1

Pillar 1 refers to a part of the international tax framework aimed at ensuring large multinational companies pay fair taxes where they generate significant profits. It primarily involves allocating a portion of these profits to countries where the companies operate and sell goods or services, not just where they are headquartered. This helps prevent tax avoidance through profit shifting to low-tax jurisdictions. Essentially, Pillar 1 establishes a new way for countries to collaborate and share taxing rights, making the tax system more equitable and ensuring that highly profitable multinational enterprises contribute appropriately to the economies they benefit from.