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Strategic Incentives For Pillar Two Adoption, Wei Cui

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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 …