On April 14, 2022 the OECD announced that it was seeking public comments/input on the Extractives Exclusion under Amount A of Pillar One. The consultation ran until April 29, 2022.

On May 3, the OECD published the input/comments it received regarding its consultation on extractives exclusion under Amount A of Pillar One. The OECD received comments from 21 contributors. The comments as published by the OECD can be found here. (zip file)

The Extractives Exclusion will exclude from the scope of Amount A the profits from Extractive Activities. The definition of Extractive Activities contains two elements: a “product test” and an “activities test”, both of which must be satisfied. This means that the exclusion applies where the Group derives revenue from the sale of Extractive Products and the Group has carried out the relevant Exploration, Development or Extraction. According to the OECD this approach reflects the policy goal of excluding the economic rents generated from location-specific extractive resources that should only be taxed in the source jurisdiction, while not undermining the comprehensive scope by limiting the exclusion in respect of profits generated from activities taking place beyond the source jurisdiction, or later in the production and manufacturing chain. More information on the OECD’s consultation and links to the consultation document can be found in our article from April 14, 2022.

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