Implementing an international effective minimum tax in the EU

93 Pages Posted: 26 Jul 2021

See all articles by Johannes Becker

Johannes Becker

University of Münster - Institute of Public Economics

Joachim Englisch

University of Münster - Faculty of Law

Date Written: June 23, 2021


This is a policy paper on the introduction of an international effective minimum tax through Union legislation. Its focus lies with an implementation of the OECD/G20 Inclusive Framework on BEPS (IF) proposal for a GloBE minimum tax (“Pillar 2” of the IF programme of work to address the tax challenges arising from the digitalisation of the economy). The paper analyses why and how the EU should transform an international agreement on GloBE into Union legislation. To this effect, it first outlines the evolution GloBE proposal and describes the concept in detail. The authors furthermore comment on still outstanding policy and technical issues. The paper also provides an economic analysis of the policy rationale underlying the GloBE, as well as a critical discussion of the tax policy arguments that have been brought forward in support of GloBE and the objections that have been raised against it. Subsequently, the legal competence of the EU for the adoption of a minimum tax directive, the constraints created by the EU fundamental freedoms, and an eventual overlap with existing EU tax legislation are extensively analysed. The authors argue that certain design modifications are needed to fit GloBE into the Union law framework; in particular, they suggest to replace the collection mechanisms envisaged in the Blueprint by the “avoider pays principle” in intra-EU relations. The paper concludes with a brief discussion of alternative reform proposals.

This paper was commissioned by the Arbeiterkammer Wien. It was last revised shortly before the July 1, 2021, Statement of 130 member jurisdictions of the Inclusive Framework on a “common approach” regarding the GloBE rules. The GloBE rationale and concept outlined in this international agreement are already fully reflected in the present paper.

Keywords: GloBE, minimum tax, Pillar 2, BEPS, METR

JEL Classification: H25, K34

Suggested Citation

Becker, Johannes and Englisch, Joachim, Implementing an international effective minimum tax in the EU (June 23, 2021). Available at SSRN: or

Johannes Becker

University of Münster - Institute of Public Economics ( email )

Wilmergasse 6-8
Muenster, 48143

Joachim Englisch (Contact Author)

University of Münster - Faculty of Law ( email )

Universitaetsstr. 14-16
Muenster, 48149

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