Tax Administrative Guidance: A Proposal for Simplifying Pillar Two

The final version is published in: Intertax, Volume 50, Issue 3

TRR 266 Accounting for Transparency Working Paper Series No. 70

29 Pages Posted: 1 Mar 2022

See all articles by Cedric Döllefeld

Cedric Döllefeld

University of Muenster - Faculty of Law

Joachim Englisch

University of Muenster - Faculty of Law

Simon Harst

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management)

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management)

Felix Siegel

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management)

Date Written: December 13, 2021

Abstract

In the current process of elaborating an international effective minimum tax regime (Pillar Two proposal of the OECD/G20 Inclusive Framework), simplification measures to minimize compliance costs for the affected multinational enterprises (MNEs) are a key element of the outstanding technical issues still to be agreed upon. In this article, the authors propose design options for an administrative safe-harbour based on the “Tax Administrative Guidance” approach mentioned in the 2020 Blueprint. The concept aims at designating countries that are generally low risk, or for which a full GloBE declaration may not be required. The authors proposed concept allows MNEs to use existing information in order to avoid having to calculate a full GloBE effective tax rate for a particular jurisdiction, while ensuring an objective and fair assessment of all interested jurisdictions. After laying out the mechanics of the simplification proposal, the authors demonstrate the feasibility of their approach with a detailed case study.

Keywords: GloBE, minimum tax, ETR, Pillar Two, Simplification, BEPS

Suggested Citation

Döllefeld, Cedric and Englisch, Joachim and Harst, Simon and Schanz, Deborah and Siegel, Felix, Tax Administrative Guidance: A Proposal for Simplifying Pillar Two (December 13, 2021). The final version is published in: Intertax, Volume 50, Issue 3, TRR 266 Accounting for Transparency Working Paper Series No. 70, Available at SSRN: https://ssrn.com/abstract=3984349 or http://dx.doi.org/10.2139/ssrn.3984349

Cedric Döllefeld

University of Muenster - Faculty of Law ( email )

Germany

Joachim Englisch

University of Muenster - Faculty of Law ( email )

Universitaetsstr. 14-16
Muenster, 48149
Germany

Simon Harst (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Ludwigstraße 28
Munich, DE Bavaria 80539
Germany

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Ludwigstr. 28 RG IV
Munich, Bavaria 80539
Germany
+49 (0) 89 / 2180 - 3681 (Phone)
+49 (0) 89 / 2180 - 3874 (Fax)

HOME PAGE: http://www.en.steuern.bwl.uni-muenchen.de/index.html

Felix Siegel

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

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