Implementing a (Global?) Minimum Corporate Income Tax: An Assessment from the Perspective of Developing Countries

Andrea Riccardi Sacchi

Research output: Working paperResearch


Seven years have passed since the BEPS Action Plan was launched by the OECD and Action 1 identified the tax challenges derived from the digitalisation of the economy as a relevant area to be addressed. While questions around taxing business income in an increasingly digitised economy, are still waiting for an answer, countries have started acting unilaterally. Against this situation, as from January 2019 the stream of work at the OECD has changed and apparently, a novel era –“BEPS 2.0”- has started under the slogan of working on a “without prejudice” basis. Indeed, a two-pillar approach was set out: Pillar One dealing with the international allocation of taxing rights and Pillar Two, with “remaining/unresolved” base erosion and profit shifting issues. In this regard, the members of the Inclusive Framework on BEPS have committed to reach an agreement on a global solution by the end of this year 2020. Under this scenario the objective of this chapter is to focus on Pillar Two and to assess from the viewpoint of developing countries, the so-called “Global Anti-Base Erosion (GloBE) proposal”, clearly inspired in the US tax reform of December 2017. After describing the international tax context in which the GloBE proposal emerged, we explore the policy rationale and mechanics behind the rules constituting the GloBE package, evaluating them so as to make some comments and suggestions which we understand may better serve general interests of developing countries, in particular, with reference to the income inclusion rule, the ordering criterion and the introduction of substance carve-outs. After concluding that the convenience of the GloBE proposal to foster economic development is at least doubtful we question whether this complex Pillar Two is necessary at all. In any case we consider it should complement the work undertaken under Pillar One as this may be closer to address what we believe is the real problem.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School [wp]
Number of pages41
Publication statusPublished - 2020
Externally publishedYes
SeriesCBS LAW Research Paper


  • Tax
  • Digitised economy
  • BEPS action plan
  • Global anti-base erosion proposal (GloBE)

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