This report analyses the proposed model rules for a global anti-base-erosion minimum tax on corporate profits (the GloBE) issued by the G20/OECD Inclusive Framework on BEPS on 20 December 2021.

The agreement that countries wishing to do so will introduce a global anti-base erosion tax (GloBE) was a historic breakthrough. Such concerted counter-measures could put a brake on the competition to reduce tax on the profits of multinational enterprises (MNEs), and perhaps even reverse it. They could also potentially assist a renewed attempt to rebalance the allocation of rights to tax MNE profits according to where they have real activities and value is created. Although the GloBE opens a new way forward, its direction and destination remain uncertain, and a longer-term solution will require continuing efforts on all sides.

In view of the importance of this initiative, we are publishing our analysis of the Model Rules now, although neither the Commentary nor the Implementation Framework have yet been released. These rules are highly detailed and complex, and in our view it is both unrealistic and undesirable to expect any country simply to enact them verbatim in its domestic laws. The OECD cannot legislate for the world, nor is there a global tribunal that could resolve the many practical and interpretation issues they will inevitably raise.