The Income Inclusion Rule of BEPS 2.0 and its Compatibiliy with EU-law and International Law

Halldor Kjærulff Beck

Student thesis: Master thesis


This thesis is examining the Income Income Inclusion Rule, which is part of Pillar Two of BEPS 2.0. The aim is to examine whether IIR is compatible with EU-legislation and international tax law using legal method. The thesis uses different reports from OECD, professional articles written by experts within the relevant field and legal provisions such as articles in TEUF and in the Model Convention of OECD. Chapter 1 is a brief introduction to BEPS 2.0 while chapter 2 provides a more detailed description of the rule in order to give the reader the necessary background information. Furthermore, chapter 3 describes the interplay between the three dimension of international tax law, which is national legislation, Union-legislation and international law. Furthermore, chapter 4 is an introduction of the definition of directives and a brief description of the Proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union. Chapter 5 and 6 contains the analysis. Chapter 5 discuss to what extent IIR is compatible with EU law focusing on the Freedom of Establishment and the principle of subsidiarity. Further this chapter examines the eventual effect of non-compatibility and the effect of a harmonized approach compared to using national measures. Certain issues regarding the implementation of the CFClegislation is included to the extent where it is relevant for IIR. Chapter 6 discuss whether IIR is compatible with international law focusing on the Model Convention of OECD and especially Article 7 regarding business profit while it includes relevant commentaries to certain articles. Finally, chapter 7 aim to conclude whether IIR is compatible with international law and EU-law based on chapter 2 to chapter 6.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2022
Number of pages78
SupervisorsPeter Koerver Schmidt