The Global Minimum Tax | Selected Issues on Pillar Two

S. 1921. Introduction

In the initial stages, the OECD faced the task of devising a criterion to delineate this initiative’s scope of application. The primary objectives were to ensure effectiveness, simplicity, and alignment with existing frameworks. Subsequently, the EUR 750 million revenue threshold, akin to the revenue threshold employed in country-by-country reporting (CbCR), was selected as the criterion governing the applicability of the global minimum tax. The GloBE Model Rules restrict their application to MNEs with consolidated group revenue from or above EUR 750 million in two of the four most recent financial years. Nevertheless, this revenue threshold prompts several inquiries such as why it is set at EUR 750 million instead of another figure, what constitutes this revenue, and which subsidiaries’ revenue is encompassed within this threshold and which is excluded.

In practice, it is undeniable to opine that the discussion and analysis of the legal aspects and special features of Pillar Two have been extensively and comprehensively conducted. Nonetheless, the topic of the EUR 750 million revenue threshold was not frequently put on the table for in-depth discussion. As the first ...