THE GLOBAL MINIMUM TAX (OECD PILLAR TWO) AND EU LAW: WHAT'S NEXT?

This thesis investigates the evolving dynamics of international taxation in an era marked by the rapid expansion of digital commerce and the increasing mobility of capital across borders. It scrutinizes the challenges that arise from the strategies multinational enterprises (MNEs) use to reduce their global tax liabilities, such as Base Erosion and Profit Shifting (BEPS). These strategies often involve profit shifting to low-tax jurisdictions, which undermines the revenue bases of governments and poses a threat to the integrity of global tax systems. The study outlines the collaborative response of the Organization for Economic Co-operation and Development (OECD) and The Group of Twenty (G20) to these challenges, focusing on the development of the Global Minimum Tax under Pillar Two of the BEPS project. This measure is designed to align the taxation of profits with the locations where economic activities and value creation occur. Additionally, the thesis examines the European Union's (EU) approach to these international tax issues, particularly its efforts to integrate the Global Minimum Tax into EU law. The goal is to harmonize tax rules across its member states and establish a tax system that is fair, transparent, and effective. Structured in five chapters, the thesis provides a detailed exploration of the Global Minimum Tax. Chapter 1 sets the context by discussing tax competition and its implications globally and within the EU, leading to the introduction of the Pillar Two framework. Chapter 2 delves into the mechanics of the Global Minimum Tax, including the Global Anti-Base Erosion (GloBE) rules and the methodologies for calculating the effective tax rate and the GloBE base. Chapter 3 explains the calculation and application of the Top-Up Tax, and the processes for determining tax liabilities across jurisdictions. Chapter 4 investigates the implementation of the GloBE Directive within the EU, its constitutional considerations, and its relationship with EU law. Chapter 5 offers a comparative analysis of the international repercussions of Pillar Two, looking at its effects on different regions and its role in international tax competition. Through this analysis, the thesis aims to shed light on the complexities of the Global Minimum Tax and its integration into EU legislation, contributing to the broader discussion on reforming the global tax framework.