The work by OECD – within the Pillar Two – aims to prevent structures where income is transferred to low-tax jurisdictions to reduce or completely avoid taxation.
The work by OECD – within the Pillar Two – aims to prevent structures where income is transferred to low-tax jurisdictions to reduce or completely avoid taxation.
Furthermore, the purpose is to prevent a “raise to the bottom” between jurisdictions in terms of the level of their corporate taxation. This is suggested to be achieved, by a global solution designed to ensure that large multinational companies pay a minimum level of tax regardless of where the headquarter is located or where operating units are located.
The Blueprint of Pillar Two, published on 12 October 2020, presents the technical details of such global solution, where proposed GloBE-rules should be applicable if income in multinational companies is taxed below a certain acceptable minimum level. The GloBE-rules (Global Anti-Base Erosion) constitute several interlocking rules which are aimed to prevent that taxation is reduced or completely avoided by transferring the income to a low-tax jurisdiction.
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