BEPS 2.0 – Part 3: Pillar Two

Following on from the second part in this series, which looked at the proposal under Pillar One, the third and penultimate part in this series will examine the proposal under Pillar Two. 

Pillar Two focuses on the remaining BEPS issues and seeks to develop rules that would provide jurisdictions with a right to “tax back” where other jurisdictions have not exercised their primary taxing rights or where certain payments are otherwise subject to low levels of effective taxation. In this way, Pillar Two would impose a minimum tax on foreign profits derived by multinational groups, which is expected to reduce the incentive for taxpayers to engage in profit shifting and establish a floor for tax competition among jurisdictions. As such, Pillar Two is known as the “Global Anti-Base Erosion” (GloBE) proposal.