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Empirical evidence on the global minimum tax: what is a critical mass and how large is the substance‐based income exclusion?

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  • Michael P. Devereux
  • Johanna Paraknewitz
  • Martin Simmler

Abstract

This paper presents empirical evidence on the proposed global minimum tax (GMT) of the OECD's Pillar 2. First, it addresses how many, and which, countries or country groups can be seen as constituting a ‘critical mass’ for its successful implementation; given such a critical mass, remaining jurisdictions worldwide will have an incentive to implement the GMT as well. Second, it assesses the generosity of the substance‐based income exclusion (SBIE), which is informative for the revenue collected under the GMT.

Suggested Citation

  • Michael P. Devereux & Johanna Paraknewitz & Martin Simmler, 2023. "Empirical evidence on the global minimum tax: what is a critical mass and how large is the substance‐based income exclusion?," Fiscal Studies, John Wiley & Sons, vol. 44(1), pages 9-21, March.
    • Handle: RePEc:wly:fistud:v:44:y:2023:i:1:p:9-21
    DOI: 10.1111/1475-5890.12317
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    References listed on IDEAS

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    1. Michael P. Devereux, 2023. "International Tax Competition and Coordination with A Global Minimum Tax," National Tax Journal, University of Chicago Press, vol. 76(1), pages 145-166.
    2. Mona Baraké & Neef Theresa & Paul-Emmanuel Chouc & Gabriel Zucman, 2021. "Minimizing the Minimum Tax? The Critical Effect of Substance Carve-Outs," Post-Print halshs-03323087, HAL.
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