The EU Commission launches call for experts
The Missions aim to deliver solutions to key global challenges by 2030: Adaptation to Climate Change, Cancer, Restore our Ocean and Waters, Climate-Neutral and Smart Cities and A Soil Deal for Europe. Each Board will consist of up to 15 independent high-level experts with diverse profiles, such as from business, public administration, science, culture, citizen engagement, and civil society organisations, from across Europe and beyond.
Building on the work of the first Mission Boards who were in charge until December 2021, the main tasks of the new ones will be to raise awareness among citizens and to advise on the actions of each of the Missions´ implementation plans. Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth, said: “This call for new Mission Boards members is the opportunity to take on new skills and bring together top experts to support the Missions. They will help inspire citizens and advise on the implementation plans. Together we will make our Missions a success.” Missions are a novelty of Horizon Europe and also an original concept in EU policy, bringing together several Commission services under the authority of nine College members. They provide a mandate to achieve specific goals in health, climate and the environment, in a set timeframe. The call for applications to join the five Mission Boards is available online until 2 February 2022, 17:00 CET. More information is available here.
Winter 2022 edition moves virtual due to rising pandemic concerns
- Virtual platform to provide sourcing and networking opportunities.
- Educational line-up to continue in online format.
After careful consideration regarding the increased concerns surrounding COVID-19 as well as New York State regulations we have made the difficult decision to cancel the Winter 2022 edition in-person segment of Texworld New York City and Apparel Sourcing New York City. In lieu of the physical event, both shows will continue virtually and can be accessed live during the original show dates, January 25-27, 2022.
Texworld and App Sourcing
Our high level of international participation, increasing travel restrictions, and rising number of COVID-19 variant cases has led to a significant deterioration in the general conditions for holding the in-person shows. “Our primary concern is always the responsibility we feel towards our exhibitors, partners, attendees, and staff. While this is disappointing for all involved, we hope there is a level of understanding that this was a necessary step to help keep each other safe in these unprecedented times.” – Jennifer Bacon, Show Director, Fashion & Apparel.
The Virtual Platform will open with similar features found on the trade show floor. Attendees will be able to take advantage of the AI-powered matchmaking capabilities of recommended textile suppliers, video meetings, and more. In addition, the highly anticipated educational program scheduled for January’s in-person show will also continue virtually; dates and times remain unchanged. The full schedule for Textile Talks and the Lenzing Seminar Series can be found on our websites:
The Texworld and Apparel Sourcing New York City team remains hopeful and focused on delivering a successful Summer 2022 edition with plans to take place in-person on July 19-21 in New York City.
Despite this unfortunate obstacle, we want the industry to know that we are fully committed to serving and supporting the community that we love. We intend to continue to create abundant opportunities to support the textile and apparel community as well as serve as a place for inspiration for designers, buyers, and industry professionals. Until we meet again.
Fluidity, glamour and pop culture: The top trends of 2021
Vogue Business breaks down the biggest fashion industry trends of 2021, from new purchase behaviours to new modes of dressing.
By guest author Lucy Maguire from Vogue Business
In 2021, fashion re-emerged from lockdown even as the ever-present pandemic persisted. Rather than a return to normalcy, the trends that dominated this year reflected a moment of continuous change.
Glamour made a comeback, as customers shed their athleisure wear for going-out clothes and office attire once more, but with more comfort and versatility than before. In-person fashion shows returned; this time more closely tied to digital elements such as live streaming, YouTube and TikTok content. And digital clothing and virtual worlds took off for fashion this year, even as physical events returned.
“This is the new way going forward — people are dressing in this virtual world, and in the metaverse in the future, you can dress in reality and virtual reality,” Hugo Boss CEO Daniel Grieder said during a keynote session at the Vogue Business and Google Summit in November. “You have to adapt to this world and to new technology. A lot of things are new for us, but you can’t say it’s too advanced, or you have no chance.”
If 2020 was the year of online trends such as cottagecore, 2021 was the year of macro trends as parts of the world reopened and fashion’s tectonic plates continued to shift. Lines are blurring, between new and old, online and off, and across gender. Some aesthetic trends, including Y2K fashion, have stuck around, but dominating the trends cycle this year was a pre-pandemic and pandemic life hybrid approach to where, how and what people shop.
As we move to 2022, Vogue Business reflects on a year of evolution in luxury fashion and beauty, with the help of leading luxury buyers.
The investment boom
There’s been a shift to “buy less, buy better” among young people, meaning higher priced goods are selling well across retailers. As resale and rental flourish, young shoppers are keen to purchase iconic handbags and more extravagant clothing, with the knowledge they can resell it or rent it to recoup costs later on, experts agree.
HSBC analyst Erwan Rambourg first noted the buy less, buy better trend, told Vogue Business in April, “We’re coming out of a pretty stressful moment and from a consumer perspective, you want to make sure what you’re buying will stick around for a while.”
Platforms like StockX, which emulates the stock market, plays well into young people’s interest in finance. They increasingly see clothing and shoes as an alternative investment class, said senior economist Jesse Einhorn, who agrees that fashion investment is one of the biggest trends of the year.
In the second half of 2021, fashion returned to glamour and with that, customers started to invest in eveningwear, heels and suiting, says Browns buying director Ida Petersson. “Our customers are choosing to invest from a buy now, wear now perspective, and so it isn’t surprising to see the ‘going out-out’ trend truly performing as we approach the holiday and party season,” she says. In mid 2020, during the height of the pandemic, Browns saw fine jewellery, watches, and classic designer handbags outperform with customers looking at acquiring investment styles or pieces that hold value — these categories are continuing to do extremely well for the retailer and other players, such as Selfridges.
“Women are absolutely going to want to get dressed up,” Carolina Herrera creative director Wes Gordon, who showed embellishment, gowns and bright colours for Autumn/Winter 2021, told Vogue Business earlier this year. “But, I think what fun clothes and special occasion pieces mean for 2020 and 2021 and beyond is very different from what they meant in 2019 and 2018.”
Fluidity in all forms
Young consumers in particular are resisting all kinds of categorisation when it comes to fashion retail and marketing, according to research from Bain & Company and Depop. Gen Z want brands to offer them gender fluid merchandising, physical and digital activations, resale and retail in one place.
“There are no boundaries anymore between commerce and connections, consumption and production, and even entertainment and entrepreneurship,” Federica Levato, a partner at Bain, said in May. “This extends to how these generations view life and society, but also fashion. When it comes to newness, this generation has a new lens through which they see ‘new’.”
First, gender-free fashion continued to surge in 2021. Saks Off Fifth removed all gendered signage this year from over 100 stores, said chief merchant Molly Taylor. Designer Harris Reed was named fourth hottest brand in the world in the Lyst Year in Review, while celebrities including Lil Nas X (Lyst’s third most influential person of 2021) have inspired people of all genders to dress how they feel. It’s not just fashion, consumers are resisting gendered categories across jewellery and beauty, too.
Lines between business models are blurring as well, and consumers want blended resale and retail. Grailed, which received investment from Goat Group this year, sells secondhand and new fashion and streetwear in one place, which has helped it reach over 7 million users and over 3 million listings, according to the company. Net-a-Porter partnered with Reflaunt this year, allowing customers to resell their luxury goods to receive store credit or cash. Similarly, Browns launched a takeback programme with Thrift+. “Fashion is fluid and our tastes change so today more than ever, the resale/take back model is extremely important, and we feel strongly that this is the next step in fashion’s journey towards a more sustainable future,” Petersson says.
The Reflaunt launch also comes at a time when customers at scale are seeking this type of service, says Net-a-Porter’s Cranfield. “Over the past 19 months there has been an increase in customers shopping with a purpose,” she says. “Through gathering customer insights, our surveys proved that the appetite is there, and that 66 per cent of Net-a-Porter customers were already buying and selling pre-loved designer items.” The customer interest within this space continues to grow, and retailers are “excited” to see how it evolves in the upcoming years.
People also want a hybrid between physical and digital fashion. Brands have launched collaborations with real world and virtual products, from Balmain’s NFT sneakers to the Balenciaga x Fortnite collaboration, which dropped in-game and real life products on the same day in September.
“The most important element about these projects is to really tie the NFT — tie everything that is digital — to a physical experience,” Balmain CMO Txampi Diz told Vogue Business. “This is a perfect example of how I see the future of NFTs.”
Pop culture power
Music, TV series, films, memes: fashion is closer than ever to pop culture in 2021.
Some of the most influential fashion players today are stars across film, TV or music, instead of traditional influencers. In Lyst’s year in review, actor Zendaya and popstar Dua Lipa topped the influence charts in first and second place. Zendaya, in collaboration with her stylist Law Roach, has had standout red-carpet moments including Balmain’s latex dress, which caused a 190 per cent surge in searches for Balmain dresses shortly after, per Lyst.
It’s crucial to stay tapped into pop culture to design for Gen Z, said Yoon Ahn, founder of Ambush and creative director of Dior Men’s jewellery during the Vogue Business Hard Luxury forum. Dior Men collaborates with artists and musicians: Justin Bieber is the face of Balenciaga; Gucci continues to dress Harry Styles for every appearance and tour; and Dua Lipa drove the large majority of media impact after walking Versace’s Spring/Summer 2022 show and has boosted the profile of smaller brands such as Maximilian, Knwls and Luar.
“From the viral on set imagery from the Sex and the City reboot and House of Gucci film, to the incredibly important statements on mental health from phenomenal athletes Naomi Osaka and Simone Biles. We saw [pop culture] throughout the SS22 collections,” says Petersson.
Petersson cites Miu Miu’s notorious Y2K-themed runway and their revival of the Miu Miu Club and Balenciaga’s take on The Simpsons as key pop culture inspired moments — “we saw and felt it everywhere this year,” she says.
Creative upcycling and bootlegging
Germanier, Conner Ives, Rave Review, Duran Lantink, Chopova Lowena, Marine Serre: the list of creative upcyclers reads like a list of fashion’s buzziest talents. Upcycling has become not only mainstream, but for many consumers and buyers it’s actually more desirable than brand new clothing, because it has a story to tell.
In August, Net-a-Porter introduced the Designed for Circularity attribute, championing brands that step away from throwaway culture by using upcycling techniques and extending the lifecycle of products.
“At Net-a-Porter we are committed to driving the industry forward and proud to support these brands that carefully consider the design process from start to finish, taking into account the materials, waste and manufacturing methods when creating their collections,” says Lea Cranfield, chief buying and merchandising officer at Net-a-Porter. Upcyled brands Conner Ives, Mother and ELV Denim are “incredibly popular” on the platform, she adds.
Bootlegging has also surged this year, as fashion increasingly parodies itself to align with the desire for humour among young consumers. Brands such as Tommy Hilfiger and art collective MSCHF have used bootlegging this year to hold a mirror up to luxury and align with subculture. Brands have even “bootlegged” one another, from Versace x Fendi’s “Fendace” show for SS22, to the Gucci and Balenciaga “hacking” show for AW21, which surprised audiences across the world.
This year, a lot of planning was done around fashion sustainability — but less action. The biggest theme as we head into 2022 is the interconnection between carbon emissions, equity and supply chain.
By guest author Rachel Cernansky from Vogue Business
This year, fashion made pledges to sustainability at COP26, material innovation accelerated and interest in circularity piqued. Most importantly, a growing realisation emerged that climate change is as much about equity as it is about carbon going into 2022.
“Climate change is not about emissions. It’s about a system that has been benefiting some at the expense of the vast majority of people on the planet and the planet itself,” says Muhannad Malas, senior climate campaigner for advocacy group Stand.earth.
For all its sustainability efforts, fashion has made little tangible progress this year. Emissions are still going up, circularity remains elusive, next-gen textiles have yet to scale and countless garment workers are going hungry. Actions speak louder than words, but even so, for the fashion industry, heightened conversation and urgency is a positive sign. Critics are encouraged that some of the biggest brands and highest-ranking executives are talking about end-of-life impacts and establishing biodiversity strategies, reflecting a shift in mindset as new strategies are developed for next year.
“The last 12 months have shown me that mindsets and decision-making frameworks are changing,” says Rebecca Burgess, executive director of the nonprofit Fibershed. Alarm bells are going off, she says, triggering meaningful action.
To date, fashion’s sustainability progress has been slow because it is designed to be, by tweaking only around the edges, advocates say. Sea change is now part of the conversation, more so than before. Eliminating fossil fuels and increasing worker wages, which require systemic transformation of both industry infrastructure and business models, rise to the top of experts’ list as the most fundamental priorities to address next year. They also rank among the top sustainability themes that emerged from fashion this year.
Fossil fuels and low wages: Fashion’s enablers
Decarbonising the fashion supply chain is a complicated challenge, but the level of difficulty does not make the need less urgent. If the industry devotes itself to actually achieving it, the process will need to be so sweeping that it will inherently tackle some of fashion’s other problems along the way, such as waste and overproduction and the overuse of hazardous chemicals.
The proliferation of low-cost fossil fuels is largely responsible for how fashion came to operate the way it does today, says Malas. “Rethinking fashion without fossil fuels is going to help catalyse this conversation about how we deal with overproduction.”
Low labour costs are another enabler of the current challenges. “The price of clothing is artificially low, partially because of poor working conditions,” says Elizabeth Cline, director of advocacy and policy at the nonprofit Remake. That’s what leads to the larger, systemic issues including overproduction and consumer waste. “The industry is being subsidised by these low wages.”
“In terms of forcing a system change, increasing the power of labour — organising power, wages — it is absolutely one of the most effective ways to dramatically shift the business model,” she says.
Social progress is mixed
Many of the industry’s environmental initiatives, however, leave people out of the equation. “Building a decarbonised fashion industry is not going to solve all of our environmental challenges,” says Cline, adding that the renewable energy sector is also vulnerable to human rights abuses. “Looking at the UN Sustainable Development Goals, number one is poverty alleviation. It’s not more recycled plastic in your collections.
And while labour efforts have made some progress, they don’t add up to the systems change experts say is necessary.
The focus on purchasing practices is a textbook example, says Kim van der Weerd, former garment factory manager and host of the podcast Manufactured. Contracts between brands and suppliers ultimately determine the social and environmental standards in manufacturing. They had some time in the spotlight this year, which van der Weerd says is a change from just a year or two ago — but it’s still not enough.
“As an industry, I sometimes feel that we’re trying to push for improved purchasing practices in isolation, without addressing the root cause,” she says. “The root cause of bad purchasing practices is that brands have little to no skin in the game, the absence of shared financial risk. We should be pushing for things that re-distribute financial risk, and better purchasing practices will follow.”
The Bangladesh Accord, the unprecedented industry agreement that improved factory safety after the Rana Plaza tragedy in 2013, was renewed this year in a victory for labour advocates. However, the uncertainty leading up to it was, for many, a sign that the underlying dynamics that lead to poor working conditions have not improved much.
“What is most notable about 2021 is all that hasn’t changed, and the resumption of the way things were,” says Jill Tucker, head of the Laudes Foundation’s labour rights programme, who sees pandemic-era workloads as the most recent evidence for that. “Workers are back to working 60+ hours [per] week with all the same problems and the same wages. The industry is still relying on voluntary measures and auditing regimes that have been proven to be ineffective. The industry has tried to use carrots; we need real rules and sticks.”
The passing of Senate Bill 62 in California, though, left others more optimistic. The collaborative efforts that led to successfully passing that legislation reflect a shift in views about where solutions need to come from and who should be responsible for developing them — not industry-led initiatives and not just consumers, as many past campaigns have relied on, but also suppliers and small brands already operating with practices the bill was designed to enforce.
“The bill sets an important legal precedent — that brands are jointly responsible for worker wages — that is already being used as a blueprint for change globally,” says Cline.
Leaving partial fixes behind
Ecologists have concerns about solutions becoming diluted as they scale. As regenerative agriculture catches on, for example, its practices are increasingly applied in a selective manner, without transforming the wider systems that require regeneration. It also continues to be too siloed, says Julie Stein, co-founder Wildlife Friendly Enterprise Network, who has said fashion and society in general forget that farms should be part of nature, not separate from them. “My hope is that we can expand the definition of regenerative to include truly wildlife-friendly practices,” she says.
Other existing industry tactics have fallen short, sometimes to the point of impeding progress. Lower-impact materials that improve but don’t transform supply chains, such as better cotton and recycled polyester, are key examples. Malas sees a contradiction in how brands use, and talk about, recycled polyester in particular, which is fashion’s most popular “sustainable” material, but is made from plastic, releases microfibres into the environment and perpetuates a dependence on fossil fuels.
Toward the end of the year, all eyes were on COP26 and partial fixes continued to be on display, but there was also hope: leaders condemned fossil fuels unequivocally for the first time and made more connections between climate and biodiversity. Fashion had a bigger and more wide-ranging presence than ever before and the event had the largest Indigenous representation in COP history. However, many were left feeling disappointed: global leaders set weak emissions targets and watered down their final agreement, while fashion failed to fund the work needed to meet its own climate goals. Nor did the industry attempt to address the bigger, underlying issues at play, says Laudes Foundation’s Tucker. “Ignored at COP, and by brands, is any conversation and action around volume and growth and endless consumption.”
Sweeping changes, such as transforming business models to address overproduction, may be daunting. However, not only would this be the most promising path to achieving global targets, advocates say, it would also drive progress on other peripheral problems. Recognising that all of the challenges are interconnected also simplifies, in a way, the search for ways to solve them by sustaining focus on the root problems. This year, the industry may have begun to awaken to that reality. “I see light bulbs going off at deeper levels,” says Fibershed’s Burgess. “With brands we are working with, transformative ideas are becoming increasingly part of the collective vision.”
Kelheim Fibres – Severe Impact of Natural Gas Price Increases
Over the past 14 days, the wholesale cost of natural gas in Germany has risen by more than 50%. This increase presents an extraordinary challenge for industry, and there is no sign of support or intervention from the Government. Indeed, recent statements are destined to provoke a worsening of the situation.
Kelheim Fibres is entirely dependent on natural gas for the generation of electrical energy and steam and has no viable short-term alternatives. In addition, the raw materials used by the company often consume high levels of energy in their production and are also increasing significantly in cost. These increases in cost jeopardise the future of the business if they cannot be passed on though the supply chain.
Kelheim Fibres is calling on the Government of Germany to take immediate steps to mitigate the impact of the cost increases for natural gas and is committed to work to implement alternative sources of energy in the medium term.
In parallel, the disruption to global logistic networks that has been seen throughout 2021 is now expected to continue throughout 2022. Massive increases in shipping rates – in some cases in excess of 80% – are being imposed without notice and with no opportunity for negotiation. These costs must also be passed on though the supply chain if businesses are to remain viable.
To address these issues, Kelheim Fibres is implementing the following measures with immediate effect:
- The increased cost of energy and freight will be passed on in prices to customers at the soonest opportunity;
- If necessary, changes or adjustments to existing agreements will be negotiated to reflect the increased cost levels;
- If the necessary increase in fibre prices cannot be secured, cuts to production will be implemented with the objective of minimising losses until the cost increases can be mitigated.
As the drivers for the increases in natural gas prices appear to be temporary in nature, we will maintain any price adjustments under review and pass on any relief to customers.
Craig Barker, CEO of Kelheim Fibres, describes the current situation as critical. “The cost increases we are facing are unprecedented and call for swift and decisive action. We are determined to take the necessary steps to preserve the future of our business and provide security of supply for our customers. At the same time, we are relying on the support of our customers to help us conquer the challenges our business is facing.”
Kelheim Fibres GmbH is the world’s leading manufacturer of viscose speciality fibres.
Innovative products, flexible technologies and an exceptional focus on sustainability form the foundation of the company’s success.
Our speciality fibres are used in most diverse applications from fashion, hygiene and medical products to nonwovens and speciality papers.
All our fibres are made from 100% wood pulp from PEFCTM or FSC© certified sources. They are fully biodegradable and offer an environmentally sound alternative to petroleum-based materials in a broad range of different end products – while maintaining or even enhancing the functional performance of the product.
The production takes place exclusively in Germany and complies with the strict German environmental legislation. Our closed-loop philosophy and an energy-efficient way to operate our plants help to save valuable resources. Kelheim Fibres is the first viscose manufacturer worldwide with an EMAS-validated environmental management system.
French Presidency of the Council of the EU
On January 1, 2022, France took over the presidency of the Council of the EU. The presidency rotates among the EU Member States every 6 months. During this 6-month period, the presidency chairs meetings at every level in the Council, helping to ensure the continuity of the EU’s work.
On this occasion, Eurostat publishes some information and statistics about France.
Is homeware the future of the high street?
The high street is changing, with the global pandemic fuelling the transformation. As Ikea replaces Topshop, we explore what’s next for bricks and mortar.
By guest author Sue Omar a Beauty and Fashion journalist, with work published in The Evening Standard, ELLE UK, Stylist and Grazia.
The British high street has had a major makeover, with fashion giants shifting online and furniture and homeware names expanding their presence. With so much change underway, what does the future hold?
The high street’s been on a slow decline for years. Pre-pandemic, various reports recorded falling footfall and an increasing number of stores closing. The survivors were predominantly non-independent and often sold fashion and beauty products.
But since the start of the pandemic in March 2020, even these firms have felt the pinch. Large numbers of fashion stores, including Debenhams, Warehouse and Gap, have left the high street to move online. According to the UK Ecommerce Forecast 2021 report by market research company eMarketer, ecommerce will account for 38.6% of total retail sales in the UK by 2025.
Digital-first retailers are coming to the fore in huge sections of the marketplace. Earlier this year, online fashion and beauty retailer Asos acquired leading British brands like Topshop from Sir Philip Green’s Arcadia empire in a £330 million deal. The move followed the closure of Topshop’s iconic Oxford Street store.
But not every retailer is staying away from the high street. As Topshop exited Oxford Street, Swedish homewares brand Ikea moved into the flagship store, signalling a major shift for high street retail.
“We see a huge opportunity to reach many more people in London and this investment marks part of a long-term plan to transform our retail business, bringing Ikea closer to customers with a new format store,” says a spokesman for Ikea.
With Ikea investing close to half a million pounds to replace Topshop, homeware retail is becoming just as essential as high street fashion. “Oxford Circus is a central shopping environment, with excellent public transport links, where people already work, live, and play and is an iconic hub that Ikea is eager to be a part of,” says the Ikea spokesman.
“In spite of the store closures witnessed over the past few months, we continue to see unprecedented demand for products that enable our customers to live a better life at home, and firmly believe that physical retail will continue to be an essential part of our business and the shopping experience for customers, as centres for inspiration and expertise, community and engagement.”
What’s behind this change? Successive lockdowns, coupled with the rise of remote working, mean we’re spending more time in our homes. That’s had a massive impact on consumer spending and shopping habits, with many prioritising what they need over what they’d like to purchase.
“More time spent at home has given people time to sit back and re-evaluate what they’re looking for in their living space, which has led to an increase in demand for homeware retail,” says Mick Quinn, co-founder and co-director of Raft Furniture.
“Since the reopening of retail, we have seen a 60% increase on our pre-pandemic sales and more footfall from customers than ever before.”
But fashion isn’t in full retreat. Elsewhere on the high street, fast fashion is still standing. Retailers like Primark bounced back as pandemic restrictions eased, with the retailer enjoying sales of £1.6bn for its third quarter in 2021. This success could be down to the retailer’s affordability. It also remains exclusive to the high street, despite the digital transformation of most other retail brands.
Even so, there’s still almost 13 million square feet of space available on the high street, as reported by property advisors at the Altus Group. With such large spaces to fill, left behind by the likes of Debenhams and John Lewis, it’s no wonder that some furniture and homeware retailers see the high street as an exciting new opportunity.
“Homeware is much more of an investment for consumers than fast fashion, which is why the high street is a prime location for browsing before you buy and making considered purchases that will ultimately stand the test of time,” says Charlie Bowes, director of high street homeware retailer Original BTC.
Beyond homeware, we may see empty spaces on the high street snapped up by discount outlets like Home Bargains. They could also be repurposed into restaurants, cafes, business complexes and even homes.
“The future high street needs to be a mixture of retail stores and other outlets, not just homeware,” says Quinn. Without a rich diversity of places to visit, he says, the high street will cease to be the all-encompassing experience that post-lockdown consumers crave.
As retailers recover from the pandemic, there’s no doubt the high street will continue to transform, serving brands that want a physical presence to better connect with loyal customers and reach wider audiences. Pop-up stores and short-term letting might be pursued by big brand retailers who want to promote products on a seasonal basis or partner with smaller brands with an ethical message. However, they may still rely on online sales as their main source of income.
“Amazon, one of the first and most successful online retailers, is now starting to open shops on the high street, which just goes to show that physical retail is here to stay,” says Linda Ralph, senior vice president of Mood Media. “The high street stores of the future will evolve to become brand destinations providing unique customer experiences, ultimately blending the advantages of both online and offline together to create a bigger impact.”
OECD releases Pillar Two model rules for domestic implementation of 15 % global minimum tax
The OECD on December 20, 2021, published detailed rules to assist in the implementation of a landmark reform to the international tax system, which will ensure Multinational Enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023.
The Pillar Two model rules provide governments a precise template for taking forward the two-pillar solution to address the tax challenges arising from digitalisation and globalisation of the economy agreed in October 2021 by 137 countries and jurisdictions under the OECD/G20 Inclusive Framework on BEPS.
The rules define the scope and set out the mechanism for the so-called Global Anti-Base Erosion (GloBE) rules under Pillar Two, which will introduce a global minimum corporate tax rate set at 15 %. The minimum tax will apply to MNEs with revenue above EUR 750 million and is estimated to generate around USD 150 billion in additional global tax revenues annually.
The GloBE rules provide for a co-ordinated system of taxation intended to ensure large MNE groups pay this minimum level of tax on income arising in each of the jurisdictions in which they operate. The rules create a “top-up tax” to be applied on profits in any jurisdiction whenever the effective tax rate, determined on a jurisdictional basis, is below the minimum 15% rate.
The new Pillar Two model rules will assist countries to bring the GloBE rules into domestic legislation in 2022. They provide for a co-ordinated system of interlocking rules that:
- define the MNEs within the scope of the minimum tax;
- set out a mechanism for calculating an MNE’s effective tax rate on a jurisdictional basis, and for determining the amount of top-up tax payable under the rules; and
- impose the top-up tax on a member of the MNE group in accordance with an agreed rule order.
The Pillar Two model rules also address the treatment of acquisitions and disposals of group members and include specific rules to deal with particular holding structures and tax neutrality regimes. Finally, the rules address administrative aspects, including information filing requirements, and provide for transitional rules for MNEs that become subject to the global minimum tax.
“The model rules released today are a significant building-block in the development of a two-pillar solution, converting the foundations of a political agreement reached in October into enforceable rules,” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. “The fact that Inclusive Framework members have managed to reach a consensus on this detailed and comprehensive set of technical rules demonstrates their commitment to a co-ordinated solution to addressing the challenges raised by an increasingly digitalised and globalised economy.”
In early 2022, the OECD will release the Commentary relating to the model rules and address co-existence with the US Global Intangible Low-Taxed Income (GILTI) rules. This will be followed by the development of an implementation framework focused on administrative, compliance and co-ordination issues relating to Pillar Two. The Inclusive Framework is also developing the model provision for a Subject to Tax Rule, together with a multilateral instrument for its implementation, to be released in the early part of 2022. A public consultation event on the implementation framework will be held in February and on the Subject to Tax Rule in March.
To access the full text of the model rules, including an overview, FAQs as well as fact sheets on the application of the rules, visit https://oe.cd/pillar-two-model-rules.
Download the Explainer document.
Further information on the two-pillar solution for addressing the tax challenges arising from digitalisation and globalisation of the economy is available at https://oe.cd/bepsaction1.
New innovation hub for sectional warping in India
KARL MAYER opens demo centre for the ISOWARP in Ahmedabad, India.
On October 15, 2021, the KARL MAYER Group in India had two reasons to celebrate: on the auspicious day of the Hindu festival celebrating “Dussehra”. Its affiliated company, KARL MAYER Textile Machinery India Pvt. Ltd., paid homage to the Hindu Deity Satyanarayan and opened a new demo center at its site in Ahmedabad, in order to be even closer to the market and to its customers. The highlight of the new location for the presentation of machines is the ISOWARP. This powerful sectional warping machine is built in Ahmedabad to facilitate short delivery times and optimum spare parts supply to our customers. KARL MAYER Textile Machinery India delivered its first
The ISOWARP in the new demo centre of KARL MAYER Textile Machinery India Pvt. Ltd. in Ahmedabad
The ISOWARP processes spun yarns and filament yarns and is particularly suitable for standard applications in the fields of apparel fabrics and home textiles. It is able to produce warp beams of exceptionally high quality and thus enables significant increases in quality and productivity in the weaving mill.
Interested parties can now see this for themselves in the new demo center. “We are looking forward to welcome our visitors. Our customers can come to us and see exactly how the ISOWARP works. We will show them the most important features of the machine in practical use and will be available for questions and discussions,” explains Kevin Socha, Director at KARL MAYER Textile Machinery India Pvt. Ltd. The KARL MAYER India team and the ISOWARP will also be available in Ahmedabad for processing tests. This helps customers to test their pattern development and can help decide which products should go into bulk production, it can also be used for the preparation of warps for smaller production lengths.
The company also offers training for its customers’ technical personnel. “Only with the right knowledge of the warp preparation process can the potential for competitive advantages be exploited,” says Raja Poptani, General Manager Finance & Administration at KARL MAYER Textile Machinery India Pvt. Ltd. The training offer includes courses at the textile manufacturers’ premises, but also qualification events with theoretical and practical parts in the, just opened, demo center on the ISOWARP.
And, of course, customers who opt for the high-performance sectional warping machine can benefit from the R&D know-how of the KARL MAYER Group and the support of its worldwide service organization. “We offer full support, from development to the finished pattern,” says the KARL MAYER India Team.