Global Minimum Tax Reform and the Future of Tax Competition

Taxation Law Research Programme (TLRP)

Global Minimum Tax Reform and the Future of Tax Competition

15 March 2023

Powerpoint is available HERE

In the current age of globalisation, capital mobility has contributed to international tax competition. While some countries succeeded in attracting as much foreign investment as possible by offering lucrative tax benefits, other countries have found themselves suffering from loss of tax revenue. For more than two decades, the Organisation for Economic Cooperation and Development (OECD) has been playing a leading role in the multilateral cooperation to combat harmful tax competition. On 8 October 2021, 136 jurisdictions under the Base Erosion and Profit Shifting Inclusive Framework reached a historic agreement to introduce a global minimum tax reform that aims to curb tax competition between jurisdictions. Will tax competition disappear under the global minimum tax reform? If not, what will it be like in the post-Pillar Two environment? This presentation will first discuss the problems of tax competition and give a historical account of the OECD’s efforts to tackle harmful tax competition. It will analyse how the OECD’s attitude and approach to address tax competition has evolved since the 1998 Report. Then, it will contemplate the future of tax competition in the post-Pillar Two environment. On the one hand, it will analyse how, and to what extent, the global minimum tax reform will reach its goal of curbing tax competition. On the other hand, it will explore any remaining scope for tax competition, based on the key technical designs of Pillar Two and the latest reactions of various jurisdictions.

Jeremy Jingxian Chen is a PhD student of International Tax Law in the Law School at the Wuhan University. He is also a member of the Wuhan University International Tax Law Research Centre and a student editor of Wuhan University International Law Review. He was a Visiting Research Associate in the Faculty of Law at the University of Hong Kong. He was an intern at the Supreme People’s Court of China and KPMG Beijing. He has been awarded the China National Scholarship for three times. He has published in Chinese journals such as the Law Science, the China Law Review and the Contemporary Finance & Economics, as well as English journals such as the Bulletin for International Taxation and the Asia-Pacific Tax Bulletin. His research interests include tax competition, digital taxation and tax matters in international investment law.

Chair: Professor Richard Cullen, TLRP Convenor

Enquiries: Flora Leung at