A Guide for Developing Countries on How to Understand and Adapt to the Global Minimum Tax
Public Consultation Draft
Many countries will be affected by the Pillar Two Global Anti-Base Erosion (GloBE) minimum tax proposal whether or not they participate actively in the OECD–G20 Inclusive Framework on base erosion and profit shifting. The GloBE initiative creates a pool of potential tax revenues on corporate multinationals’ incomes to be collected by GloBE participating countries whenever the effective tax rate of a multinational in the country falls below 15%. Some domestic tax measures intended to attract and keep foreign investment may lose their effectiveness as a result. Further, some of GloBE’s impact may be indirect, providing lawmakers with an opportunity to consider policy reforms whether or not they adopt GloBE itself. It is in the interest of each country to examine the potential applicability of GloBE to its taxpayers and the interplay of GloBE rules with its domestic tax system in order to make informed decisions about whether and in what manner to respond. This guide provides guidance for making such informed decisions.
This version is for public consultation. Interested parties from government, academia, industry, and civil society are invited to review the document and submit written feedback to [email protected] with the subject line “IISD ISLP Guide on Global Minimum Tax - comments” by January 29, 2023.
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