The Global Minimum Tax | Selected Issues on Pillar Two

1. Introduction

To understand the nature of a “global minimum tax”, one must carefully analyze its constituent elements, particularly whether any special feature within its calculation could enable the persons in scope to carve-out a certain portion of their income from the taxable base. If such a mechanism is introduced, a distinction would actually exist in terms of the tax burden deriving from the “global minimum tax” for each taxpayer depending on special circumstances by which the carve-out would operate. It is needless to say that the question arises whether having a carve-out in this context would imply that the use of terms such as “minimum tax” or “minimum effective rate of taxation” is actually in line with its terms and/or mechanics.

In that regard, this chapter first discusses the background of and idea behind the introduction of a substance-based carve-out within the Pillar Two context (hereS. 484inafter referred to as “SBIE”) considering the actual goals pursued by the Inclusive Framework when drafting the rules governing its functioning and calculations. Should there be a distinction between “apples and oranges” when analyzing the effects that a minimum tax would have on com...