The OECD’s global minimum tax as a solution to 21st century taxation?

On 6 December 2024, Dieter Bettens successfully defended his doctoral dissertation on the Organisation for Economic Cooperation and Development (OECD)’s global minimum tax at the Faculty of Law and Criminology of the KU Leuven.

Globalisation and digitalisation have introduced new challenges to the international tax system, which was established over a century ago. Multinational enterprises are increasingly involved in base erosion and profit shifting while jurisdictions compete with one another through tax incentives to attract investment.

To tackle these challenges, the OECD reached an agreement within its Inclusive Framework to implement a global minimum tax. This tax, which is referred to as Pillar Two, establishes a 15% minimum tax rate on large multinational enterprises in every jurisdiction where they operate along with a subject-to-tax rule to be implemented in treaties.

This dissertation begins with a legal-technical analysis of the various rules of Pillar Two. he application of the rules is demonstrated with numerous examples, while potential challenges and uncertainties are emphasised. The dissertation then conducts a thorough evaluation of the Pillar Two rules based on the following three criteria: effectiveness, complexity and political feasibility. In this context, the dissertation also examines the concept of tax competition. Drawing on the insights gained from this analysis, flaws in the current design are identified and recommendations for improvement are provided.

Dr. Dieter Bettens earned his Master’s degree in Law from KU Leuven in 2020. He then began his PhD research at the Institute of Tax Law at KU Leuven. Currently, he is a lawyer at Deloitte Legal. He wrote his doctoral dissertation with the scientific guidance of Em. Prof. dr. Luc De Broe.