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The use of accounting information in the tax base in the Pillar 2 global minimum tax: a discussion of the rules, potential problems, and possible alternatives

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  • Michelle Hanlon

Abstract

In this paper, I provide a high‐level, non‐technical review of how accounting information is used in Pillar 2 and what this means for the tax base. In addition, I discuss potential problems of using accounting data explicitly in a minimum tax and then, specifically, as the starting point for the computation of the income measures in Pillar 2. I then discuss several alternative solutions that may be simpler – or at least no more complex – and, importantly, pose fewer problems in terms of the quality of financial accounting information and the information available to capital markets.

Suggested Citation

  • Michelle Hanlon, 2023. "The use of accounting information in the tax base in the Pillar 2 global minimum tax: a discussion of the rules, potential problems, and possible alternatives," Fiscal Studies, John Wiley & Sons, vol. 44(1), pages 37-52, March.
    • Handle: RePEc:wly:fistud:v:44:y:2023:i:1:p:37-52
    DOI: 10.1111/1475-5890.12320
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    References listed on IDEAS

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    2. Michelle Hanlon & Michelle Nessa, 2023. "The Use of Financial Accounting Information in the OECD BEPS 2.0 Project: A Discussion of the Rules and Concerns," National Tax Journal, University of Chicago Press, vol. 76(1), pages 193-232.
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    8. Hanlon, Michelle & Laplante, Stacie Kelley & Shevlin, Terry, 2005. "Evidence for the Possible Information Loss of Conforming Book Income and Taxable Income," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 407-442, October.
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    Cited by:

    1. Jan Neugebauer & Marek Vokoun, 2024. "Economic and Political Dynamics of Globalization: A Review of Continuity and Change in Research Focus," International Journal of Economic Sciences, European Research Center, vol. 13(1), pages 30-57, May.

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