10 Pages Posted: 27 Nov 2019

See all articles by Mindy Herzfeld

Mindy Herzfeld

University of Florida Levin College of Law

Date Written: 2019


The OECD is moving forward with consideration of a minimum tax as part of its solution to taxation of the digital economy. Part of a template for such a minimum tax may be the version enacted by the United States (US) in 2017 as an expansion of its Controlled Foreign Corporation (CFC) regime, known as Global Intangible Low Taxed Income (GILTI). But the OECD version will undoubtedly be different from the US iteration. It’s likely that it would also include some aspects of a minimum tax being proposed by other OECD members such as Germany and France, namely a tax on outbound payments, in addition to a CFC-type regime. The United States also enacted an outbound minimum tax in 2017, known as Base Erosion Anti-Abuse Tax (BEAT). The two-part minimum tax being pursued by the OECD – a minimum tax based on a CFC regime plus an outbound minimum tax that’s a variation on the BEAT – has been referred to as GLOBE (global anti erosion) (See S. Soong Johnston, Germany, France Explore GLOBE Proposal to Tax Digital Economy, 92 Tax Notes Int’l 782 (2018)).

This article summarizes the two features of the US 2017 tax reform (known as the Tax Cuts & Jobs Act (TCJA) (The formal name is The Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, Pub. L. No. 115–97.)) that may be incorporated into a global minimum tax, namely GILTI and BEAT, from the perspective of how such provisions might be adapted to work in a global setting. It considers the challenges to taxpayers and policy makers raised by the US law as enacted, and the attempts in recently issued regulatory guidance to address some of these concerns. It compares and contrasts the provisions enacted by the US Congress with a number of parallel European developments, including the EU Anti-Tax Avoidance Directive (ATAD)’s CFC rules and the German royalty deduction barrier.

Adaption of the minimum tax components of the Tax Cuts & Jobs Act for worldwide use will require careful understanding of the policy choices, as well as the mistakes made, by the TCJA drafters in designing the regime, in order to ensure that they are not repeated.

Note: “Reprinted from INTERTAX, Volume 57, Issue No. 5, 2019, pages 504-513, with permission of Kluwer Law International.”

Keywords: anti-avoidance, Controlled Foreign Corporation, global anti erosion, Tax Cuts & Jobs Act, TCJA, GILTI

Suggested Citation

Herzfeld, Mindy, Can GILTI + BEAT = GLOBE? (2019). INTERTAX, Volume 47, Issue 5, 2019, University of Florida Levin College of Law Research Paper Forthcoming, Available at SSRN: or

Mindy Herzfeld (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

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