Analysis of the international network of double tax treaties reveals a large potential for tax avoidance. Developing countries are, on average, not more likely to suffer from tax revenue losses than other countries. Yet, this average masks the fact that several countries, such as Bangladesh,...

This Perspective discusses the fiscal and economic impacts of the global minimum tax; currently being implemented by many countries around the world. The global minimum tax is expected to raise tax revenues, reduce profit-shifting, and allow jurisdictions to strike a better balance between...

This paper documents new facts on corporate taxation and the revenue potential of corporate minimum taxes, leveraging firm-level tax returns from 16 countries. First, effective tax rates follow a humped-shaped pattern with firm size: small firms benefit from reduced rates, while large firms take...

This chapter provides a description of one of the key anti-tax-avoidance rules to combat profit shifting by multinational corporations, so called Controlled Foreign Corporation (CFC) rules that directly target income in low-tax countries. We explain some key institutional features of CFC...

The Global Minimum Tax (GMT) is applied only to firms above a certain size threshold, permitting countries to set differential tax rates for small and large firms. We analyse tax competition between a tax haven and a non-haven country for heterogeneous multinationals to evaluate the effects of...

We develop a methodology to decompose the tax revenue impact of the global minimum tax introduced in 2024 into several components and quantify its potential impact on profit shifting. We apply it to 34 thousand multinational-country observations from tax returns, financial statements and...

The OECD’s proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decline of corporate tax rates. We study the revenue effects of the GMT by focusing on strategic tax setting effects. The direct effect from less profit shifting increases revenues in high-tax countries. A...

This paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for subsidiaries of multinational corporations. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct payroll costs and user costs of...

The OECD's proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decline of corporate tax rates. We study the revenue effects of the GMT by focusing on strategic tax setting effects. The direct effect from less profit shifting increases revenues in high-tax countries. A...

This paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for all subsidiaries of multinational corporations that are not shell companies. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct...

Countries may soon adopt domestic minimum taxes in response to the global minimum tax under the Global Anti-Base Erosion (GloBE) regime. These taxes, which will have priority over the global minimum tax under GloBE, could become the primary measure of ensuring that multinational enterprises...

This paper articulates and, using newly-assembled data, explores how international taxation affects aggregate tangible cross-border investment. Spillovers from statutory tax rates abroad seem: As sizable as effects from the host's rate; larger than previous consensus values (attributed to a...

This paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for all subsidiaries of multinational corporations that are not shell companies. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct...

Transnational corporations (TNCs) act as unitary firms in an increasingly globalised economy, but taxes on their profits are levied by national states. Hence, international tax rules have from the start been riven by contradictory approaches: either to determine the taxable profits attributable...

This paper investigates the incentives for countries to implement and maintain the global minimum tax introduced by the G20/OECD’s Inclusive Framework 2021 agreement: Pillar 2. It argues that the agreement has sufficient elements to create incentives for large headquarters countries to...

This paper articulates and, using newly-assembled data, explores how international taxation affects aggregate tangible cross-border investment. Spillovers from statutory tax rates abroad seem: As sizable as effects from the host's rate; larger than previous consensus values (attributed to a...

The OECD’s proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decades-long race to the bottom of corporate tax rates driven by competition over real investments and profit shifting to low-tax jurisdictions. We study the revenue effects of the GMT by focusing on the induced...

This paper studies how the global minimum tax shapes national tax policies and welfare in a formal model of international tax competition with heterogeneous countries. The net welfare effect is generally ambiguous from the perspective of non-havens. On the one hand, the global minimum tax raises...

The rise of globalization has become a double-edged sword for countries seeking to implement a beneficial tax policy. On one hand, there are increased opportunities for attracting foreign capital and the benefits that increased jobs and tax revenue brings to a society. However, there is also...

This paper constructs and analyzes a rudimentary game-theoretic model to better understand the policy choice between a global minimum tax regime that operates country-by-country and one that operates based on MNEs’ global average tax rates. The paper’s findings run counter to the consensus...

To tackle profit shifting, the OECD/G20 Inclusive Framework proposes a Global Minimum Tax that requires that if a multinational enterprise (MNE) declares its operations in a jurisdiction taxing less than the global minimum tax, the countries where the real economic activity takes place would...

The OECD’s proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decades-long race to the bottom of corporate tax rates driven by competition over real investments and profit shifting to low-tax jurisdictions. We study the revenue effects of the GMT by focusing on the induced...

The OECD's proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decades-long race to the bottom of corporate tax rates driven by competition over real investments and profit shifting to low-tax jurisdictions. We study the revenue effects of the GMT by focusing on the induced...

The taxation of the digitalized economy is the single most important topic in international tax negotiations today. The OECD has devised a "Two Pillar solution" to the problem. Pillar One is focusing on a reallocation of taxing rights to market jurisdictions, which are largely expected to be...

This paper studies how the global minimum tax shapes national tax policies and welfare in a formal model of international tax competition with heterogeneous countries. The net welfare effect is generally ambiguous from the perspective of non-havens. On the one hand, the global minimum tax raises...

This paper studies how the global minimum tax shapes national tax policies and welfare in a formal model of international tax competition with heterogeneous countries. The net welfare effect is generally ambiguous from the perspective of non-havens. On the one hand, the global minimum tax raises...

The OECD has proposed implementing a global minimum tax, and the US already has in place one version of such a regime in the form of GILTI. A key design choice in the imposition of a global minimum tax is whether the minimum should be tested on a country-by-country basis or on the basis of an...

The proposed OECD Pillar One and Two reforms mark a significant shift in the way large multinational enterprises are taxed on their global incomes. However, while considering the reform at the proposed scale tax administrators must be able to compare the revenue gains with alternatives. This...

The Research Paper commences with an overview of Pillar One and Pillar Two followed by detailed discussions on salient provisions of Pillar Two. Pillar Two is envisaged to have a widespread impact on Small Island Developing States (SIDS) which are a distinct group of 38 United Nations (UN)...

In this research paper, we attempt to estimate the tax revenues to be gained (or lost) by the South Centre and African Union's Member States under the Amount A and Article 12B regimes. Our analysis relied on sources of information available to private sector researchers but did not involve...

Die OECD hat mit ihren Reformvorschlägen zum Zwei-Säulen-Modell für eine neue, vermeintlich gerechtere globale Steuerordnung große Erwartungen geweckt. Ambitioniert sind Zeitplan und Ziele. Noch 2022 soll die gesetzgeberische Umsetzung der Regeln erfolgen, die das internationale Steuerrecht...