Effects of the Implementation of Pillar II BEPS on International Tax Competitiveness

Abstract

The implementation of Pillar II of the OECD/G20 Base Erosion and Profit Shifting (BEPS) framework introduces a global minimum tax designed to curb aggressive tax competition and profit shifting by multinational enterprises. This article examines the implications of Pillar II for international fiscal competitiveness, focusing on how the new rules reshape the landscape of tax incentives, investment decisions, and jurisdictional attractiveness. While the global minimum tax aims to promote fairness and reduce harmful tax practices, it also challenges traditional strategies used by states to maintain competitive tax regimes. The analysis highlights both the potential benefits - such as increased transparency and stability—and the risks, including diminished sovereignty in tax policy and reduced flexibility for smaller economies. Ultimately, the study explores whether Pillar II fosters a more balanced international tax environment or constrains countries’ ability to compete for global capital. CZU: 339.137:336.22(100); JEL: F38, E63, H25, H26