No. 70: Tax administrative guidance: A proposal for simplifying Pillar Two

Year: 2022
Type: Working Paper
Open Science:


In the current process of elaborating an international effective minimum tax regime (Pillar Two proposal of the OECD/G20 Inclusive Framework), simplification measures to minimize compliance costs for the affected multinational enterprises (MNEs) are a key element of the outstanding technical issues still to be agreed upon. In this article, the authors propose design options for an administrative safe-harbour based on the “Tax Administrative Guidance” approach mentioned in the 2020 Blueprint. The concept aims at designating countries that are generally low risk, or for which a full GloBE declaration may not be required. The authors proposed concept allows MNEs to use existing information in order to avoid having to calculate a full GloBE effective tax rate for a particular jurisdiction, while ensuring an objective and fair assessment of all interested jurisdictions. After laying out the mechanics of the simplification proposal, the authors demonstrate the feasibility of their approach with a detailed case study.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, Goethe University Frankfurt, WHU – Otto Beisheim School of Management and University of Cologne who share the same research agenda.

Cookie Consent with Real Cookie Banner