OECD Pillar Ⅱ GloBE Rules And China’s Countermeasures

The Global Anti-Base Erosion Rule(GloBE Rule)has a major impact on the field of corporate income tax.It stipulates the minimum tax payable by enterprises on their global economic income,and ensures that taxpayers fulfill the minimum tax obligation through a series of rules designed to regulate the global tax avoidance behaviors of multinational corporations.Although there are different interests among the United States,the European Union and developing countries,after several years of negotiations and negotiations,the G20/OECD "two-pillar" plan finally reached a comprehensive consensus around the world,and the implementation of GloBE Rules has become a major trend of international tax reform.GloBE Rules is the core concept,aiming to solve the remaining problems of BEPS action plan in preventing profit shifting and tax base erosion.In terms of system design,it specifically covers two major contents: Income Inclusion Rules and Undertaxed Payment Rules.The revenue inclusion rule attempts to set a threshold for the application of the rule with a globally uniform fixed minimum tax rate.The Undertaxed Payment Rules corresponds to the "limited minimum tax deduction",focusing on the actual effective tax rate of a single payer.The applicable rules and implementation safeguard rules of IIR and UTPR provide normative guidance for tax reform in various countries.GloBE Rules are in line with the development trend of globalization,but the rules do not consider the actual situation of economic development of various countries,ignoring the differences of tax interests between countries,and there is a suspicion of interference in the tax sovereignty of various countries.The rules make the power of national tax policy making limited,and the regional tax departments have the shrinking power of tax administrative law enforcement,which poses a challenge to the national tax sovereignty.Secondly,the original intention and objectives of GloBE rules formulated in Pillar II are difficult to coordinate with the strategy of China’s new development pattern at the present stage,which will hinder multinational companies’ investment in China and Chinese enterprises’ investment in countries along the "Belt and Road".As a result,rules have materially adverse effects on investment and trade.Thirdly,in the short term,the GloBE Rule of Pillar II weakens the tax competitiveness of developing countries with tax incentives as the core,and the distribution of tax power is more favorable to developed countries,making the tax distribution between developed countries and developing countries more unfair.Finally,under the current conditions,the implementation of GloBE Rules will reduce the efficiency of international tax collection and administration based on the consideration of institutional cost,technical cost and measurement cost.GloBE rules challenge the principles of tax sovereignty,tax neutrality,tax fairness and tax efficiency.It is necessary to solve the problem through some domestic legislation transformation and supporting system.In order to deal with the risk and challenge brought by the landing of GloBE rules,our country should protect the interests of our country by "choosing to apply IIR and not reduce the applicable standard temporarily" as capital exporting country,and introduce "qualified domestic minimum payment tax" to ensure our government’s right to tax foreign investment in China.The GloBE rules are introduced into domestic legislation through two aspects of system construction.At the same time,China needs to take measures to improve the rules of controlled foreign enterprises,adjust the minimum tax rate provisions of the shareholding exemption system,and change the existing domestic anti-tax avoidance rules to adapt to the new requirements of the global tax reform.In addition,faced with the impact of the GloBE Rules on tax preference policy,our country can adjust the domestic tax preference rules by adjusting the preferential policy of tax credit,increasing the tax preference of other tax categories.In addition,in the face of the increasing system cost and measurement cost of collection and administration,it is necessary to enhance the discourse power of tax governance and cultivate the ability of tax collection and administration based on the cooperation system of "The Belt and Road" tax collection and administration.