The OECD’s Global Minimum Tax and its Implementation in the EU: A Legal Analysis of Pillar Two in the Light of Tax Treaty and EU Law

The OECD’s Global Minimum Tax and Its Implementation in the EU is a book that aims to elucidate the fundamental and technical issues surrounding the global minimum tax. It seeks to unravel the complex ramifications of GloBE’s technical framework and endeavours to explore the relationship between the OECD’s soft law materials, including the OECD’s GloBE Model Rules and the GloBE Commentary, tax treaties, and the EU’s recently adopted GloBE-Directive. Seldom in the history of international tax law have there been so many evolutions in such a short space of time: in a dizzying array of reports, work programs, consultations, and announcements, the OECD, with the active support of the EU, has developed a framework for a global minimum tax (Pillar Two or GloBE). Meanwhile, jurisdictions face practical difficulties incorporating an incredibly complex set of rules into their domestic legal systems.

What’s in this book:

The author analyses Pillar Two from a technical and a policy perspective and also provides for a thorough examination of the compatibility of Pillar Two with tax treaties and EU law. To this end, the analysis also comprises illustrative examples and pragmatic solutions to a myriad of technical and policy issues of Pillar Two. Among the seminal matters covered are the following:

• History and Background of the global minimum tax discussion
• Detailed technical considerations on the design of Pillar Two, including its scope, the determination of both the ‘GloBE Income’ as well as the ‘Adjusted Covered Taxes’ and the computation of the effective tax rate as well as the computation and collection of the final ‘Top-up Tax’ liability, including the application of the QDMTT, IIR, and UTPR
• Tax policy implications and deficiencies of the final design of Pillar Two
• The relation of Pillar Two to the current distribution of taxing rights under bilateral tax treaties
• The analysis includes the compatibility of the QDMTT, IIR, and UTPR with existing tax treaties and the resolution of potential normative conflicts, both between tax treaties and domestic implementations of Pillar Two as well as between tax treaties concluded by EU Member States and the EU’s GloBE-Directive
• The role of the GloBE-Directive within the EU’s legal order, including the issue of EU internal and external competence as well as the substantive compatibility of Pillar Two with primary law, such as the fundamental freedoms

How this will help you:

In-depth comparisons between the OECD’s GloBE Model Rules and the EU’s GloBE-Directive shed light on the common points and deviations. Besides comprehensive technical considerations, the book provides a broad tax policy perspective on the global minimum tax. For its matchless clarification of the issues alone, this book will be highly appreciated by practitioners, tax authorities, policymakers, and academics concerned with the implementation and application of Pillar Two.