An end to aggressive tax practices of MNEs? Evaluation of potential legal issues arising from implementation of the global minimum tax in the European Union

Abstract

Digitalisation of economy not only has brought rapid innovation but also significant changes to international business and tax framework. This has allowed many digitalised MNEs to shift profits to jurisdictions with low taxes to avoid taxation in jurisdictions where their operations create the real value. Almost for a decade OECD had attempted to find a consensus-based solution to address tax challenges in digitalised economy which resulted in creation of two-pillar solution. In this thesis the author will focus on analysis of the Pillar Two initiative that includes new international tax rules for global minimum tax that will be imposed on MNEs. In particular, in this thesis the author analyses how implementation of GloBE Model rules through a directive ensures that the implementation of Pillar Two initiative within the European Union will be in line with the imperatives set by EU Primary law.