Bezhan Salehy and Sarah Ling (Macfarlanes) examine whether the Pillar Two undertaxed profits rule is susceptible to challenge under double tax agreements.
The OECD’s Pillar Two model rules (the ‘model rules’) are designed to ensure that MNE groups that have annual revenues of at least €750m pay an effective tax rate (ETR) of at least 15% on all of their profits on a country-by-country basis. Where an MNEs profits in a country are taxed below the minimum ETR the rules require other group entities to pay commensurate top-up taxes.
The OECD states in its administrative guidance on the model rules that the imposition of Pillar Two top-up taxes will be compatible with the provisions of the UN and OECD model tax conventions. This article identifies some arguably anomalous outcomes that might arise under the rules in practice and tests whether the OECD’s assertion is correct – or...
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Bezhan Salehy and Sarah Ling (Macfarlanes) examine whether the Pillar Two undertaxed profits rule is susceptible to challenge under double tax agreements.
The OECD’s Pillar Two model rules (the ‘model rules’) are designed to ensure that MNE groups that have annual revenues of at least €750m pay an effective tax rate (ETR) of at least 15% on all of their profits on a country-by-country basis. Where an MNEs profits in a country are taxed below the minimum ETR the rules require other group entities to pay commensurate top-up taxes.
The OECD states in its administrative guidance on the model rules that the imposition of Pillar Two top-up taxes will be compatible with the provisions of the UN and OECD model tax conventions. This article identifies some arguably anomalous outcomes that might arise under the rules in practice and tests whether the OECD’s assertion is correct – or...
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:
