A Guide for Developing Countries on How to Understand and Adapt to the Global Minimum Tax: Draft for Consultation

International Institute for Sustainable Development and International Senior Lawyers Project, December 2022

57 Pages Posted: 4 Jan 2023

See all articles by Allison Christians

Allison Christians

McGill University - Faculty of Law

Thomas Lassourd

International Institute for Sustainable Development

Kudzie Mataba

Trade & Industrial Policies Strategies (TIPS)

Eniye Ogbebor

International Senior Lawyers Project

Alexandra Readhead

International Institute for Sustainable Development

Stephen E. Shay

Boston College Law School

Zach Pouga

EY - Tax Partner; Michigan Law School

Date Written: December 15, 2022

Abstract

This Guide seeks to provide information helpful to countries making policy decisions with respect to the Pillar Two Global Anti-Base Erosion (GloBE) minimum tax proposal. The GloBE initiative creates a pool of potential tax revenues on in-scope corporate multinationals’ incomes to be collected by GloBE participating countries (that host an entity in the MNE group) whenever the effective tax rate of an entity (or entities) within the MNE group in the country falls below 15 percent. Some domestic tax measures intended to attract and keep foreign investment may lose their effectiveness as a result. Further, some of GloBE’s impact may be indirect, providing lawmakers with an opportunity to consider policy reforms whether or not they adopt GloBE itself. It is in the interest of each country to examine the potential applicability of GloBE to its taxpayers and the interplay of GloBE rules with its domestic tax system in order to make informed decisions about whether and in what manner to respond.

Keywords: taxation, development, economics, tax treaties, bilateral investment treaties, BITs, trade, stabilization, corporate tax, minimum taxes, globe, pillar 2

JEL Classification: D78, E62, F02, F23, F24, H20, H25, H77, H87, K33, K34, O38

Suggested Citation

Christians, Allison and Lassourd, Thomas and Mataba, Kudzie and Ogbebor, Eniye and Readhead, Alexandra and Shay, Stephen E. and Pouga Tinhaga, Zachee, A Guide for Developing Countries on How to Understand and Adapt to the Global Minimum Tax: Draft for Consultation (December 15, 2022). International Institute for Sustainable Development and International Senior Lawyers Project, December 2022, Available at SSRN: https://ssrn.com/abstract=4317112 or http://dx.doi.org/10.2139/ssrn.4317112

Allison Christians (Contact Author)

McGill University - Faculty of Law ( email )

3644 Peel Street
Montreal H3A 1W9, Quebec H3A 1W9
Canada

Thomas Lassourd

International Institute for Sustainable Development ( email )

United States

HOME PAGE: http://iisd.org

Kudzie Mataba

Trade & Industrial Policies Strategies (TIPS)

Eniye Ogbebor

International Senior Lawyers Project

Alexandra Readhead

International Institute for Sustainable Development ( email )

Stephen E. Shay

Boston College Law School ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Zachee Pouga Tinhaga

EY - Tax Partner ( email )

United States

Michigan Law School ( email )

625 State
street
Ann Arbor, MI MI 48109
United States

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