The Use of Accounting Information in the Tax Base in the Pillar 2 Global Minimum Tax: A Discussion of the Rules, Potential Problems, and Possible Alternatives

In this paper, I provide a high-level, non-technical review of how accounting information is used in Pillar 2 and what this means for the tax base. In addition, I discuss potential problems of using accounting data explicitly in a minimum tax and then, specifically, as the starting point for the computation of the income measures in Pillar 2. I then discuss several alternative solutions which may be simpler, or at least no more complex, and importantly, pose fewer problems in terms of the quality of financial accounting information and the information available to capital markets.