Global Minimum Taxation: A Strategic Approach for Developing Countries

29 Pages Posted: 22 Nov 2022

See all articles by Leopoldo Parada

Leopoldo Parada

University of Leeds School of Law

Date Written: November 18, 2022


The world appears to have officially embraced the altruistic idea of ensuring a minimum level of corporate income taxation worldwide, aiming to reduce tax competition and to protect the interests of both developed and developing countries. However, this ‘benefits for all’ narrative proves to be quite unrealistic for many developing countries. As argued in this article, the alleged benefits of global minimum taxation in developing countries seem to be exclusively based upon three unconvincing premises, namely the idea that all corporate income tax incentives offered by developing countries are equally inefficient; the fact that all developing countries can easily switch from corporate income tax competition to other forms of competition; and most notably, the presumption that whilst an active endorsement of a global effective minimum corporate income tax may increase developing countries’ tax revenue collection, their inaction on these matters may reflect an important revenue loss. This article makes a plea to depart from these premises, inviting developing countries to adopt a more strategic approach regarding their tax and non-tax incentives, also including alternative forms of competition. In doing so, developing countries could perhaps find an opportunity to reshape their general action plan to attract foreign direct investment (FDI) more effectively whilst they still try to ride the wave of minimum global corporate income taxation that the world seems to be in.

Keywords: GloBE; minimum taxation; corporate tax; BEPS

JEL Classification: K34

Suggested Citation

Parada, Leopoldo, Global Minimum Taxation: A Strategic Approach for Developing Countries (November 18, 2022). Available at SSRN: or

Leopoldo Parada (Contact Author)

University of Leeds School of Law ( email )

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