Compatibility of a European METR Minimum Tax with EU/EEA Free Movement Guarantees

26 Pages Posted: 14 May 2021

See all articles by Joachim Englisch

Joachim Englisch

University of Muenster - Faculty of Law

Date Written: April 14, 2021


A group of scholars has recently proposed to implement an international minimum effective tax rate (METR) for multinationals (see They have conceived the METR as a revised and modified version of the GloBE minimum tax concept currently pursued by the OECD/G20 Inclusive Framework on BEPS. Like GloBE, the METR has been designed to operate as a broad instrument against BEPS. But the international allocation of additional taxing rights regarding profits that have been taxed too low, as well as the calculation of the top-up tax, would differ from the GloBE approach. More specifically, the METR would rely on formulaic apportionment for allocating taxing rights, and it would allow the relevant jurisdictions to levy a proportional top-up tax that corresponds to its own corporate tax.

In the preparation of an exchange of views with the EU Commission services, the author of this paper has been asked to provide an external review of the compatibility of the METR concept with EU/EEA free movement rights. The paper arrives at the conclusion that the METR would give less rise to instances of discrimination – as understood in case law of the CJEU – than an unmodified GloBE minimum tax. Moreover, it is possible to adapt the METR rules so as to preserve the core concept whilst ensuring the near complete absence of disadvantageous tax treatment of cross-border situations. The remaining marginal issues would then likely be accepted as justified by the CJEU.

An earlier version of this paper was published in Tax Notes International, Volume 102, April 12, 2021.

Keywords: METR, minimum tax, GloBE, digital economy, international taxation

JEL Classification: H25, H26, K34

Suggested Citation

Englisch, Joachim, Compatibility of a European METR Minimum Tax with EU/EEA Free Movement Guarantees (April 14, 2021). Available at SSRN: or

Joachim Englisch (Contact Author)

University of Muenster - Faculty of Law ( email )

Universitaetsstr. 14-16
Muenster, 48149

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