Compatibility of a european metr minimum tax with eu/eea free movement guarantees

Compatibilidad de un impuesto mínimo europeo METR con las garantías de libre circulación de la UE/EEE

Abstract

A group of scholars who are associated with Tax Justice Network (TIN) has recently proposed to implement an international minimum effective tax rate (METR) for multinationals. The METR has been conceived as a revised and modified version of the GloBE minimum tax concept currently pursued by the OECD/G20 Inclusive Framework on BEPS. Like GloBE, the METR has been designed to operate as a broad instrument against BEPS. But the international allocation of additional taxing rights regarding profits that have been taxed too low, as well as the calculation of the top-up tax, would differ from the GloBE approach. More specifically, the METR would rely on formulaic apportionment for allocating taxing rights, and it would allow the relevant jurisdictions to levy a proportional top-up tax that corresponds to its own corporate tax rate. 
This paper analyses the compatibility of the METR concept with EU/EEA free movement rights. It arrives at the conclusion that the METR would give less rise to instances of discrimination - as understood in case law of the CIEU - than an unmodified GloBE minimum tax. Moreover, it is possible to adapt the METR rules so as to preserve the core concept whilst ensuring the near complete absence of disadvantageous tax treatment of cross-border situations. The remaining marginal issues would then likely be accepted as justified by the CIEU.