On Dec. 11, Nareit submitted comments to the OECD in response to its Public Consultation Document on its “Pillar Two Blueprint” regarding taxation of the digital economy. Among other things, the OECD has been considering global minimum tax rules (including additional cross-border withholding taxes).
Nareit had previously submitted comments to the OECD in response to its 2019 Public Consultation Document on Pillar Two, focusing on the risk that new minimum tax rules could inappropriately affect REITs if the special circumstances of REITs are not taken into account, and urging the OECD to not apply its minimum tax proposals to REITs.
Additionally, the members of REESA (Asia Pacific Real Estate Association, Association for Real Estate Securitization of Japan, British Property Federation, European Public Real Estate Association, Nareit, Property Council of Australia, and RealPAC of Canada), plus Assoimmobiliare – Industria Finanza e Servizi Immobiari of Italy, Federation des Societies Immobilieres et Foncieres of France, and ZIA, the German Property Federation, submitted a joint letter to the OECD on Dec. 6, 2019 with a similar recommendation. On July 27, 2020, Nareit submitted additional comments regarding Pillar Two. These comments provided additional information regarding REITs and again recommended that the OECD incorporate specific rules for REITs in final rules.
Among other things, Nareit’s 2020 comments welcomed the exclusion for tax neutrality regimes in the 2020 Pillar Two Blueprint to prevent the new GloBE rules from inappropriately capturing REITs, and requested that the OECD incorporate a specific reference to REITs in final rules. Nareit pointed out that more than 57% of OECD countries have REIT regimes in place, and additional OECD countries are considering the establishment of REIT regimes.
(Contact: Dara Bernstein at dbernstein@nareit.com)