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OECD pillar two compliance costs: A quantitative assessment for EU-headquartered groups

Author

Listed:
  • Bray, Sean
  • Bunn, Daniel
  • Gaul, Johannes
  • Spengel, Christoph

Abstract

This study examines the compliance costs of OECD Pillar Two, i.e., the "Global Minimum Tax," for multinational enterprises headquartered in the European Union. Collecting data from chief financial officers and heads of finance or tax departments, we estimate compliance cost determinants and subsequently predict the overall compliance burden. Results indicate total one-off costs of about EUR 1.2 billion (up to EUR 2.0 billion) and total recurring costs of EUR 517 million EUR p.a. (up to EUR 865 million EUR p.a.). Our findings inform the public discourse by mitigating information asymmetries between policymakers and corporations. Moreover, we contribute by establishing a cost benchmark to facilitate a systematic cost-benefit evaluation of this policy.

Suggested Citation

  • Bray, Sean & Bunn, Daniel & Gaul, Johannes & Spengel, Christoph, 2025. "OECD pillar two compliance costs: A quantitative assessment for EU-headquartered groups," ZEW Discussion Papers 25-053, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:330317
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    References listed on IDEAS

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    1. Sebastian Beer & Ruud de Mooij & Li Liu, 2020. "International Corporate Tax Avoidance: A Review Of The Channels, Magnitudes, And Blind Spots," Journal of Economic Surveys, Wiley Blackwell, vol. 34(3), pages 660-688, July.
    2. Janeba, Eckhard & Schjelderup, Guttorm, 2023. "The global minimum tax raises more revenues than you think, or much less," Journal of International Economics, Elsevier, vol. 145(C).
    3. Gaul, Johannes & Klein, Daniel & Müller, Jessica M. & Pfrang, Alina & Schulz, Inga & Spengel, Christoph & Weck, Stefan & Wickel, Sophia & Winter, Sarah, 2022. "Significant costs, limited benefits: A global minimum tax in Germany," ZEW policy briefs 7/2022e, ZEW - Leibniz Centre for European Economic Research.
    4. Roberto Gómez-Cram & Marcel Olbert & Holger Müller, 2023. "Measuring the Expected Effects of the Global Tax Reform," The Review of Financial Studies, Society for Financial Studies, vol. 36(12), pages 4965-5011.
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    Keywords

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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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