This paper considers the incentives created for MNEs under the Pillar 2 GloBE Rules and makes four key contributions. First, it sets out a framework for MNE strategic responses to undertaxed excess profits in the group (‘pay-up’, ‘shift (back)’, ‘sell’, ‘blend’ and ‘shelter’). Second, it theorises the creation of two new valuable tax attributes which are created under the GloBE Rules (Covered Taxes and SBIE). Third, it considers how these new attributes create incentives which introduce new distortions into the system with respect to the location and ownership of investments. Finally, it questions whether the outcomes of these strategies ought to be considered problematic and asks what countermeasures could be considered by states in response to perceived integrity concerns.
