The Pillar Two undertaxed profits rule could, in theory, be susceptible to challenge under applicable double tax agreements (for example, under business profits or non-discrimination articles). However, even if theoretically possible, there are practical obstacles to raising such a challenge and it is uncertain how, if a UTPR charge was challenged under the mutual agreement procedure of a DTA, countries’ competent authorities would approach the issue. A multilateral convention would presumably be needed to resolve such uncertainties. In the meantime, businesses must continue to navigate an uncertain international tax landscape.
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The Pillar Two undertaxed profits rule could, in theory, be susceptible to challenge under applicable double tax agreements (for example, under business profits or non-discrimination articles). However, even if theoretically possible, there are practical obstacles to raising such a challenge and it is uncertain how, if a UTPR charge was challenged under the mutual agreement procedure of a DTA, countries’ competent authorities would approach the issue. A multilateral convention would presumably be needed to resolve such uncertainties. In the meantime, businesses must continue to navigate an uncertain international tax landscape.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
