Concept and Implementation of CFC Legislation

S. 4361. Preamble/Introduction

The Organisation for Economic Co-operation and Development (OECD) together with the G20 created the Inclusive Framework, in 2016, in order to address the still remaining and new issues regarding Base Erosion and Profit Shifting (BEPS). The time this thesis was written, the Inclusive Framework consisted of 139 countries and 14 observing organisations, developing and designing cooperatively a new set of rules and instruments. The existing CFC rules, worldwide, may be partly harmonized, as in the European Union (EU), but they are always unilateral, which is an inherent flaw. The Inclusive Framework is confident in achieving a greater tax fairness around the world while creating beneficial effects both for developed and undeveloped countries, with a unified – a multilateral approach.

This thesis focuses on the development of the Inclusive Framework on the GloBE (Global Anti-Base Erosion) proposal on Pillar Two regarding a “Global Minimum Tax”. After this introduction (Chapter 1), Chapter 2 will illustrate the existing CFC rules and their limitations as well as flaws, including the still remaining issues and problems of international taxation that the CFC regimes ...