A General Income Inclusion Rule as a Tool for Improving the International Tax Regime – Challenges Arising from EU Primary Law

Intertax, 2020, vol. 48, issue 11, pp. 983-997, Kluwer Law International, Alphen aan den Rijn

Copenhagen Business School, CBS LAW Research Paper No. 21-06

33 Pages Posted: 28 Sep 2021

Date Written: September 27, 2021

Abstract

The overall concept of the OECD’s Global Anti-Base Erosion Proposal is to develop a coordinated set of rules to address ongoing risks from profit shifting and to curb international tax competition. Two important components of the proposal are the income inclusion rule and the switch-over rule and, in this article, these components are examined in consideration of EU primary law. Depending on the final design of the rules, it is concluded that the proposed income inclusion rule – however, probably not the switch-over rule – may end up restricting the fundamental freedoms by treating comparable situations differently. Against that background, a number of policy options for designing the income inclusion rule in accordance with primary EU law requirements are presented, and pros and cons of these design options are discussed.

Keywords: Global anti-base erosion proposal (GloBE), EU tax law, fundamental freedoms, tax avoidance, tax competition, tax policy

JEL Classification: K34, K33, K42, H26

Suggested Citation

Koerver Schmidt, Peter, A General Income Inclusion Rule as a Tool for Improving the International Tax Regime – Challenges Arising from EU Primary Law (September 27, 2021). Intertax, 2020, vol. 48, issue 11, pp. 983-997, Kluwer Law International, Alphen aan den Rijn, Copenhagen Business School, CBS LAW Research Paper No. 21-06, Available at SSRN: https://ssrn.com/abstract=3931343

Peter Koerver Schmidt (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshaven 18B, 1 floor
Frederiksberg 2000
Denmark

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