Recently, the term two-pillar solution/two-pillar package often seen in the news, refers to

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Q: 101 (CDS-I/2022)
Recently, the term ‘two-pillar solution/two-pillar package’ often seen in the news, refers to

question_subject: 

Current Affairs

question_exam: 

CDS-I

stats: 

0,67,72,33,13,67,26

keywords: 

{'pillar package': [0, 0, 0, 1], 'pillar solution': [0, 0, 0, 1], 'global energy security': [0, 0, 0, 1], 'international money laundering': [0, 0, 0, 1], 'term': [28, 1, 9, 27], 'international cyber crime reporting': [0, 0, 0, 1], 'news': [0, 1, 17, 65]}

The term `two-pillar solution/two-pillar package` refers to the concept of implementing a minimum global corporate tax. This concept has gained prominence in recent times and has been discussed extensively in the media. The aim of this solution is to address the issue of tax avoidance by multinational corporations.

The two pillars in this solution represent different aspects of the proposed plan. The first pillar focuses on reallocating some of the profits of large multinational companies to countries where they generate sales, regardless of their physical presence in those countries. This aims to ensure that companies pay taxes in the locations where they are actually conducting business activities.

The second pillar aims to introduce a global minimum corporate tax rate. The idea is to establish a minimum rate that companies must pay, regardless of their actual location. This is meant to prevent corporations from exploiting tax havens and using aggressive tax planning strategies to minimize their tax liabilities.

Overall, the two-pillar solution seeks to create a fairer and more equitable global tax system by addressing the loopholes that allow multinational corporations to avoid paying their fair share of taxes. It is a response to the increasing concern about corporate tax avoidance and the need for international cooperation to tackle this issue.

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