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Strategic Incentives For Pillar Two Adoption, Wei Cui
Strategic Incentives For Pillar Two Adoption, Wei Cui
All Faculty Publications
International agreements on the taxation of multinationals emerged rapidly in the last two years, as exemplified by an EU directive on a global minimum tax (commonly known as “Pillar Two”) and other countries’ announcement to implement similar rules. According to a popular narrative, the speed of Pillar Two adoption may be partly attributable to certain enforcement mechanisms that elicit the participation even of those not sympathetic to Pillar Two’s stated goals. Such mechanisms, acting on nations’ self-interest, make Pillar Two “incentive compatible” and characterizes it with a “devilish logic.”
This Article examines this narrative by systematically analyzing strategic incentives for …
Tax Harmony: The Promise And Pitfalls Of The Global Minimum Tax, Reuven Avi-Yonah, Young Ran (Christine) Kim
Tax Harmony: The Promise And Pitfalls Of The Global Minimum Tax, Reuven Avi-Yonah, Young Ran (Christine) Kim
Faculty Articles
The rise of globalization has become a double-edged sword for countries seeking to implement a beneficial tax policy. On one hand, there are increased opportunities for attracting foreign capital and the benefits that increased jobs and tax revenue brings to a society. However, there is also much more tax competition among countries to attract foreign capital and investment. As tax competition has grown, effective corporate tax rates have continued to be cut, creating a “race-to-the-bottom” issue.
In 2021, 137 countries forming the OECD/G20 Inclusive Framework on BEPS passed a major milestone in reforming international tax by successfully introducing the framework …
A New Framework For Digital Taxation, Reuven S. Avi-Yonah, Young Ran (Christine) Kim, Karen Sam
A New Framework For Digital Taxation, Reuven S. Avi-Yonah, Young Ran (Christine) Kim, Karen Sam
Articles
The international tax regime has wide implications for business, trade, and the international political economy. Under current law, multinational enterprises do not pay their fair share of taxes to market countries where profits are generated because market countries are only allowed to tax companies with a physical presence there. Digital companies, like Google and Amazon, can operate entirely online, thereby avoiding market country taxes. Multinationals can also exploit existing tax rules by shifting their profits to low-tax jurisdictions, thereby avoiding taxes in the residence country where their headquarters are located.
Recently, a global tax deal was reached to tackle these …