FAQ
T_LOGIN Log in

Don't have an account on our website?

T_REGISTER Register

Global minimum tax as a tool for strengthening economic stability

Publication date: 25.08.2025

Financial Law Review, 2025, Issue 37 (1)/2025, pp. 1-24

https://doi.org/10.4467/22996834FLR.25.001.22190

Authors

Júlia Hoffmanová
Faculty of Law, Pavol Jozef Šafárik University in Košice in the Slovak Republic
Contact with author
All publications →

Titles

Global minimum tax as a tool for strengthening economic stability

Abstract

This article explores the global minimum tax (GMT) as a legal and policy response to the growing challenges of tax base erosion and profit shifting (BEPS) in the context of globalization and digitalization. The central thesis posits that GMT can serve as an effective instrument to reinforce global economic stability, enhance tax fairness, and mitigate aggressive tax planning. Drawing upon a multidisciplinary methodology—combining doctrinal legal analysis with economic policy evaluation—the article identifies the key legal, political, and economic implications of implementing GMT. The research highlights that although GMT offers a structural solution to harmful tax competition, its success is contingent on robust international coordination, legal enforceability, and inclusiveness for developing countries. The article confirms the hypothesis that GMT has the potential to stabilize public revenues and restore equity in the international tax system, while also underlining its limitations and proposing policy recommendations. The originality of the article lies in its comprehensive analysis of the interplay between legal architecture, political constraints, and redistributive impacts of GMT in the evolving global fiscal order.

References

Download references

Beer, S., de Mooij, R. A., & Liu, L.: International corporate tax avoidance: a review of the channels, magnitudes, and blind spots. Journal of Economic Surveys, 34(3). https://doi.org/10.1111/joes.12305,2020 .

CrossRef Next

Chen, X.: The global minimum tax, investment incentives and asymmetric tax competition. arXiv. https://doi.org/10.48550/arXiv.2409.05397, 2020

CrossRef Next

Haufler, A., & Kato, H.: A global minimum tax for large firms only: Implications for tax competition. arXiv. https://doi.org/10.48550/arXiv.2404.14302, 2024

CrossRef Next

McCarthy, J.: A bad deal for development: Assessing the impacts of the new Inclusive Framework tax deal on low- and middle-income countries. Brookings Global Working Paper No. 174, Brookings Institution, 2022.

Nelson, R. R.: Base Erosion and Profit Shifting: An Overview (R44900). Congressional Research Service. https://www.congress.gov/crs-product/R44900, 2024.

Tørsløv, T. R., Wier, L. S., & Zucman, G.: The missing profits of nations (Working Paper). https://gabriel-zucman.eu/files/TWZ2021.pdf, 2021 .

Wier, Zucman, G.: Global profit shifting, 1975–2019. WIDER Working Paper 2022/121. Helsinki: UNU-WIDER, 2022.

Other Official Documents

Court of Justice of the European Union. CJEU Press Release 133/2024. Available at: https://curia.europa.eu/jcms/upload/docs/application/pdf/2024-09/cp240133en.pdf, accessed: May 20th, 2025.

European Commission. Taxation: Agreement on minimum corporate tax rate, 2022. Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_16_2923, accessed: May 20th, 2025.

European Court of Auditors. EU efforts to combat harmful tax regimes and corporate tax avoidance: Limited progress (SR No 27/2024). Publications Office of the European Union. Available at: https://www.eca.europa.eu/en/publications?ref=SR-2024-27, accessed: May 20th, 2025.

OECD. (2015). Addressing the tax challenges of the digitalisation of the economy –Action 1: 2015 final report. OECD Publishing.

OECD. (2021a). Tax challenges arising from digitalisation – Report on the Pillar Two Blueprint. OECD Publishing, 2021. Available at: https://www.oecd.org/tax/beps/tax-challenges-arising-from-the-digitalisation-of-the-economy-pillar-two-blueprint.pdf, accessed: May 20th, 2025.

OECD. (2021b). Tax challenges arising from digitalisation of the economy – Globalanti-base erosion model rules (Pillar Two). OECD/G20 Base Erosion and ProfitShifting Project, 2021. Available at: https://doi.org/10.1787/782bac33-en, accessed: May 20th, 2025.

CrossRef Next

OECD. (2023a). Global anti-base erosion model rules (Pillar Two) (Articles 1–4). OECD Publishing, 2023. Available at: https://www.oecd.org/tax/beps/global-anti-base-erosion-model-rulespillar-two.pdf, accessed: May 20th, 2025.

OECD. (2023b). Prevention of Tax Treaty Abuse – Sixth Peer Review Report on TreatyShopping. OECD Publishing, 2023. Available at: https://www.oecd.org/en/publications/prevention-of-tax-treatyabuse-sixth-peer-review-report-on-treaty-shopping_36cebf8e-en.html, accessed:May 20th, 2025.

OECD. (2024). The global minimum tax and the taxation of MNE profit. OECD Publishing, 20244. Available at: https://www.oecd.org, accessed: May 20th, 2025.

OECD. (n.d.). Global minimum tax, 2025. Available at: https://www.oecd.org/en/topics/sub-issues/global-minimum-tax.html, accessed: May 20th, 2025.

United Nations Department of Economic and Social Affairs. (n.d.). Tax Consequences of Digitalized Economy, 2025. Available at: https://financing.desa.un.org/what-we-do/ECOSOC/tax-committee/thematic-areas/tax-consequences-digitalized-economy, accessed: May 20th, 2025.

Internet Resources

BHI Consulting: Everything you need to know about the global minimum tax and its application. BHI Consulting Blog, 2024.

Gaspar, V., Hebous, S., & Mauro, P.: Tax coordination can lead to a fairer, greener global economy. IMF Blog, 2022. Available at: https://www.imf.org/en/Blogs/Articles/2022/04/12/blog041222-sm2022-fm-ch2, accessed: May 20th, 2025.

Kuźniacki, B., & Vergouwen, M.: The UTPR and the (disguised) discrimination under tax treaties. Kluwer International Tax Blog, 2025. Available at: https://kluwertaxblog.com/2025/03/21/the-utpr-and-the-disguised-discrimination-under-tax-treaties/, accessed: May 20th, 2025.

Luja, R.: The U.S. pushback on minimum corporate tax rates may test the limits of bilateral tax treaties with EU Member States. Kluwer International Tax Blog, 2025. Available at: https://kluwertaxblog.com/2025/02/18/the-u-s-pushback-on-minimum-corporate-tax-rates-may-test-the-limits-of-bilateral-tax-treaties-with-eumember-states/, accessed: May 20th, 2025.

Michel, A. N.: Navigating the Future of International Taxation: A New Report. Cato Institute, 2024. Available at: https://www.cato.org/blog/navigating-future-international-taxation-new-report, accessed: May 20th, 2025.

Parada, L.: Global Minimum Taxation and EU Competitiveness: What Now? Kluwer International Tax Blog, 2025. Available at: https://kluwertaxblog.com/2025/03/17/global-minimum-taxation-and-eu-competitiveness-what-now/, accessed: May 20th, 2025.

Baker McKenzie.: Navigating the Digital Tax Landscape, 2025. Available at: https://www.bakermckenzie.com/en/insight/publications/2025/03/navigating-the-digital-tax-landscape, accessed: May 20th, 2025.

Brown, T.: Tax Implications of Corporate Profit Shifting. House of Lords Library, 2024. Available at: https://lordslibrary.parliament.uk/tax-implications-of-corporate-profit-shifting/, accessed: May 20th, 2025.

Cole, A.: Considering Potential International Corporate Tax Reforms in the US. Tax Foundation, 2025.Available at: https://taxfoundation.org/research/all/federal/us-international-tax-reform/, accessed: May 20th, 2025.

EY: The outlook for global tax policy and controversy in 2025: jurisdiction reports, 2024.Available at: https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/insights/tax/documents/ey-gl-tpc-outlook-jurisdiction-reports-04-25.pdf, accessed: May 20th, 2025.

KPMG: Taxation of the digitalized economy. Developments Summary, 2025. Available at: https://kpmg.com/kpmg-us/content/dam/kpmg/pdf/2023/digitalized-economy-taxation-developments-summary.pdf, accessed: May 20th, 2025.

PwC: OECD Pillar Two country tracker, 2025. Available at: https://www.pwc.com/gx/en/services/tax/pillar-two-readiness/country-tracker.html, accessed: May 20th, 2025.

Reuters: Irish foreign direct investment chief plays down Trump tax move, 2025. Available at: https://www.reuters.com/markets/europe/irish-foreign-direct-investment-chief-plays-down-trump-tax-move-irish-times-2025-01-23/, accessed: May 20th, 2025.

Information

Information: Financial Law Review, 2025, Issue 37 (1)/2025, pp. 1-24

Article type: Original scientific article

Authors

Faculty of Law, Pavol Jozef Šafárik University in Košice in the Slovak Republic

Published at: 25.08.2025

Received at: 20.05.2025

Accepted at: 07.07.2025

Article status: Open

Licence: CC BY-NC-ND 3.0 Unported  licence icon

Article financing:

Funded by the EU NextGenerationEU through the Recovery and Resilience Plan for Slovakia under the project No. 09I03-03-V05-00008.

Percentage share of authors:

Júlia Hoffmanová (Author) - 100%

Classification number:

JEL Classification System:

Tax Law (K34)

Article corrections:

-

Publication languages:

English

View count: 1530

Number of downloads: 597

Global minimum tax as a tool for strengthening economic stability

Global minimum tax as a tool for strengthening economic stability

quote

download files

RIS BIB ENDNOTE