The global minimum tax as part of the international tax reform and the OECD’s Two-Pillar Model, including the integration of Pillar One into German tax law. Mechanism to Avoid Double Taxation and Implementation in German Law

by Filippo Luigi Giambrone *

ABSTRACT: Within the framework of Pillar One of the OECD-BEPS 2.0 project, the international community of states is discussing a reallocation of taxing rights from production states to market states. This article deals with the mechanism to avoid double taxation and the determination of those states that must contribute from their tax revenues. Furthermore, it explores the possibilities of constitutional and administrative implementation into German law. The author presents conceptual approaches for a dispute-free and predictable design and advocate a centrally consolidated legal and administrative implementation. In July 2021, the Organisation for Economic Co-operation and Development (OECD) reached a broad agreement at a working level for an international tax reform. The focus is on introducing fair allocation rights and a global, uniform minimum tax rate of at least 15%. Details of the so-called Two-Pillar model are being sought. Additionally, information on the roadmap for implementing the developed concept and the current status of implementation is requested. For both pillars, the lack of international coordination would lead to double and multiple taxation and, undoubtedly, a significantly higher administrative burden. In such a scenario, companies would have to comply with a multitude of different national regulations concerning their cross-border activities, ultimately resulting in multiple taxation. It raises the question on how this geolocation is supposed to be carried out.

SUMMARY: 1. Towards the Global Minimum Tax. – 2. The implementation of Pillar One into German tax law – 3. Supplementary Levy in the EU Own Resources Decision. – 4. Design of the Relief Obligation. – 4.1. Assessment-Based within the Framework of Corporate Tax. – 5. Procedural aspects. – 5.1. Necessity of a coordinated administration. – 6. Concluding Remarks.

1. Within the framework of Pillar One of the OECD-BEPS 2.0 project, the international community is discussing a redistribution of taxation rights from producing to market states. This article deals with the mechanism to avoid double taxation and the identification of those states that will have to contribute part of their tax revenue. Additionally, it explores the opportunities for the constitutional and administrative implementation into German law. The authors present conceptual approaches for a design that is as conflict-free and calculable as possible and advocate for a centrally bundled legal and administrative implementation. Many studies scrutinize the repercussions of the newly established minimum benchmarks for the worldwide execution of the OECD/G20 Pillar One reform, examining key countries amid ongoing negotiations. For over four years, members of the Inclusive Framework have been diligently negotiating a consensus on the OECD/G20 Pillar One reform with an objective to shift taxing rights to market countries. The OECD is now ardently working towards sealing this deal by the close of 2023. A significant aim of this reform is to halt the spread of varying Digital Service Taxes (DSTs).[1] In July 2023, 138 jurisdictions collectively decided to halt the introduction of new DSTs for the forthcoming year. However, five countries, including Canada, have reportedly voiced opposition, with Canada planning to proceed with a new DST.[2]

This present scenario highlights the existing tensions and trade-offs for certain countries when choosing between DST[3] and Pillar One revenues. Countries that consent to Pillar One will be obliged to renounce any form of digital taxation. Previous examinations by the EU Tax Observatory researchers revealed that the key mechanism of the reform, known as Amount A, is anticipated to reallocate €91.2 billion of profits from 68 global companies to destination market countries, consequently generating an extra €15.2 billion in global tax revenues. The OECD’s official estimates resonate with these figures. The EU Tax Observatory’s research indicates countries currently employing a DST[4] can foresee broadly analogous, or even somewhat elevated, revenues from Amount A. Nevertheless, the tangible execution of Pillar One predominantly hinges upon the countries that endorse the reform. The conclusive statement illustrates that the 138 jurisdictions of the Inclusive Framework have reached an accord on the minimum thresholds of implementation for global application, termed as “global minimum thresholds.” This agreement ensures the substantial distribution of taxing rights, as only companies headquartered in a jurisdiction that ratifies the multilateral agreement will be subject to the tax.[5] The established global minimum thresholds now mandate that at least 30 jurisdictions, encompassing at least 60% of the companies affected by the reform, are essential for the reform to be globally enforced. Drawing upon prior work, it is highlighted that the global minimum thresholds necessitate the USA’s ratification for the reform to progress worldwide. This point holds significant relevance as the US Congress has hitherto exhibited resistance to embedding the OECD-led reform into domestic legislation. US companies constitute 46% of the companies encompassed in Pillar One and 58% of redistributed profits. Absence of the USA would diminish the number of covered groups to 37, and the Amount A profits available for reallocation to €38 billion. Gross tax earnings from Amount A would see a reduction of 40.6% for developed countries, a decrease of 52.3% for developing countries, and a 28% decline for the least developed nations. No other nations have the capacity to singularly obstruct the worldwide implementation of the reform: Chinese corporations constitute 17% of the groups covered and 19% of the redistributed profits. The rest of Asia (including Japan, South Korea, and Hong Kong) make up 9% of the covered groups and 8% of the redistributed profits. The EU represents 15% of the covered groups and 7% of the redistributed profits. The USA’s ratification of the Pillar One reform holds significant importance for the European Union, as the EU Commission has suggested incorporating Pillar One revenues into the upcoming generation of the EU’s own resources. The lack of Pillar One could equate to a deficiency ranging from 7.5 to 15% of the total revenues required to finance the EU recovery package. In November 2022, the EU Parliament adopted a resolution emphasizing that should there be a distinct lack of advancement by the end of 2023, the Commission ought to introduce a legislative proposal for a digital levy or a similar measure. EU entities will thus need to meticulously balance expectations of the USA passing the reform—despite the current Congress’s opposition—or consider resorting to alternative solutions.

On October 8, 2021, 136 of the 141 states of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting have politically committed to fundamental changes in international taxation rights regarding corporate tax. This concerns Pillar One, the redistribution of taxation rights from production states to market states, and Pillar Two, a global minimum taxation. According to international rules dating back to the 19th century, profits have been taxed where companies are based or where they produce. This allocation has been increasingly criticized recently, partly because the internet enables communication and services without the need for physical presence, and partly because the shifting of profits, for instance from interest or license revenues to offshore financial centers and tax havens, still appears insufficiently contained.[6]

Within the framework of Pillar One, a formula-based portion of the profit, calculated according to revenue shares, is allocated to market states of corporate groups that achieve an external turnover of more than €20 billion and a return on sales of more than 10%. The assessment base results from the respective commercial group financial statement with modifications. Redistribution of taxation rights means that market states gain tax substrate and the previously taxing residency or production states must accordingly scale back their taxation rights, either by exempting the profits allocated to the market state, or by crediting the tax incurred in the market state to their tax on profits levied according to traditional principles. It should be noted that unlike Pillar Two, market states apply individual tax rates, which according to OECD estimates will average 26%. Germany is a market state, but given its long-standing trade balance surpluses, it is more pronouncedly a production location and could thus potentially be a loser of a redistribution of taxation rights under Pillar One. According to relevant studies, the revenue effects for Germany are inconspicuously low in the three-digit million range. However, they strongly depend on the exact design of the overall concept currently under negotiation, especially of the relief mechanism. The questions will be dealt with a focus on the relief mechanism in the second part of the contribution. The third part will illuminate the implementation of Pillar One into the German financial constitution and the resulting system of income taxation. It needs to be clarified in particular whether Pillar One should be designed as a pure federal tax, or whether it affects the federal states as a special form of corporate tax. This question gains additional explosiveness through the recent proposal for an EU own resources decision. Moreover, it will be necessary to take a position on whether Pillar One should even have an impact on trade tax. In the latter case, especially, the risk significantly increases that there may be sensitive tax losses locally in individual municipalities. This is not just a special German problem, but a question that potentially arises in all states that have a financial constitution structured according to tax revenue entitlements. Pillar I aims to define new tax rights that go beyond current criteria based on physical presence, adapting international tax rules to the ways digital economic activities operate, allowing companies to operate in markets with little or no physical presence. The agreement includes a global minimum tax for companies and a redistribution of taxation rights, particularly in the digital economy.[7] Traditionally, the profits of companies were taxed where they had a physical presence, like factories. However, in the digital era, profits are often not tied to physical presence. Large digital companies can generate significant profits in market states without having a physical presence there. The redistribution of taxation rights ensures that market states where products or services are sold can also tax these profits. The agreement applies to major multinational companies with global revenues over €20 billion and profit margins exceeding 10%. Market states will be granted taxation rights of 20% to 30% of profits above the 10% threshold. The goal is to ensure fair taxation in states where profits are generated, even without a physical presence. To prevent major digital companies from escaping taxation, the agreement ensures a segmented assessment of each business unit’s profitability. For instance, profitable platform business units will be taxed based on their own profits without offsetting them with other units.[8] The German doctrine considerations on the Amount A redistribution mechanism published so far by the OECD/G20 according to Pillar One of the BEPS 2.0 initiative prove to be highly subjective and complex. Significant ambiguities and potential for dispute exist both in determining the benefit volumes for market states and the distribution of relief obligations among the production states. For reasons of administrability and legal certainty, the designation of the states obliged to provide relief should follow a substance-based formula in line with the regulations of the minimum tax of Pillar 2. Moreover, the relief mechanism should not be company-related but state-related. Double taxation of excess profits by Amount A and according to classic profit allocation rules should be avoided by the Marketing and Distribution Safe Harbour. However, its current conception, dating from 2020, does not take into account the conceptual upheavals that Pillar 1 has since undergone. This approach should therefore be simplified and expanded so that each state can tax excess profits either as a production or a sales market state. From a financial constitutional perspective, the Amount A tax can be easily integrated into corporate tax. However, should the revenue, as proposed by the EU Commission, be included in the EU’s own resources, the Amount A tax should be levied as a separate supplementary levy with revenue sovereignty only of the federal government obliged to remit it. There would also be no substantial financial constitutional concerns against this. The mechanism to avoid double taxation should be designed as a credit against corporate tax, regardless of this decision. For simplification reasons, it should be processed through a centralized, assessment-independent, and typifying compensation procedure. Including the Amount A tax and relief obligation in the trade tax is, however, to be rejected for tax structural reasons, especially as this would partly also be subject to serious constitutional concerns. It would be conceivable, however, to include a factual relief also regarding the trade tax in the typified corporate tax compensation procedure.

Perspective arising from the German doctrine

Embarking upon a new epoch in international tax law, 136 of the 141 states within the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting inaugurated seminal shifts on October 8, 2021, as they politically affianced themselves to a foundational overhaul concerning corporate tax, encapsulated within two pillars. Pillar One orchestrates a redistribution of taxation entitlements from production to market states, whilst Pillar Two unveils a global minimum taxation.

Historically entrenched international rules, originating from the 19th century, posited profit taxation in the jurisdiction of a company’s domicile or production locale. This paradigm, however, has been subjected to burgeoning criticism in the digital age where cyberspace enables a continuum of communication and services devoid of physical presence, and where profit-shifting strategies, often through interest or license income to offshore financial centers and tax sanctuaries, persist with seemingly inadequately mitigated permeation.

Pillar One introduces a formulistic allocation of corporate group profits, computed upon revenue shares, to market states—applicable to entities eliciting external turnover exceeding €20 billion and a return on sales surpassing 10%. This assessment foundation, “Amount A,” is elucidated from the collective commercial group financial statement, encapsulating 25% of the residual or excess profit breaching a 10% profitability threshold, thereby resulting in a redistribution.

The concept of redistributing tax entitlements signifies a gain in tax base for market states, concomitantly necessitating a commensurate diminution in tax entitlements for erstwhile taxing residence or production states—either through the exemption of profits designated to the market state as Amount A or through crediting the tax incurred within the market state against their traditionally-principled profit tax.[9]In the execution of Pillar One, a theoretical zero-sum game unfolds amongst states. Multinational corporations, aside from compliance efforts, behold neither demerits nor merits, provided the Amount A tax is equitably counterbalanced by the relief. Notably, market states implement idiosyncratic tax rates, which, per OECD estimates, shall approximate an average of 26%.

Germany, whilst being a market state, is, considering its historical trade balance surpluses, prominently a production location and could potentially emerge as a relative underachiever in a Pillar One-informed redistribution of tax entitlements. German doctrine posits that the revenue impacts for the nation are discreetly minimal, though they pivot intensively upon the precise sculpting of the globally negotiated overall concept, particularly on the relief mechanism.[10]

Pivotal considerations emerge regarding the excess profit, its derivation from commercial group accounting, and its potential misalignment with the agglomerated tax assessment bases of the group. States designated for crediting or exemption may grapple with the necessity to forgo a larger fragment of the local tax balance sheet residual profit or perhaps even the routine profit, given an excess profit surpassing tax assessment bases. Subsequent discussions elucidate the relief mechanism and explore the infusion of Pillar One into the German financial constitution, scrutinizing its resultant system of income taxation and German doctrine therein, with an amplification of significance due to the recent EU own resources proposal.

In essence, Pillar One’s embodiment in taxation law demands an elegant navigation through a milieu of corporate and state financial considerations, strategically balancing a new paradigm of global tax justice with the nuanced practicalities and exigencies of national fiscal health and corporate compliance.[11]In relation to market linkage (b), an emphasis on sales to end customers is pivotal, encompassing sales via foreign distributors and sales by foreign processors when the group’s preliminary services are implicated, directly or indirectly. To distribute revenues, the OECD delineates eight categories (e.g., trading in finished goods, digital goods, components, providing services, licensing, or selling intangible goods), with some having subcategories, further stratified by B2B and B2C sales. For each, criteria to tentatively determine end-consumer location (such as place of delivery/service, use, sales outlet, customer residence, place of publication, destination, etc.) are proposed. When a “reliable indicator” isn’t discernible via these criteria, macroeconomically derived “allocation keys” should be employed. Given the lack of operational instructions in the OECD’s working paper and the inevitable complexities in investigation and evaluation, a considerable measure of arbitrariness in sales spatial localization can be anticipated. Outcomes will hinge not solely on fact-based rules but on the cooperation strategy of corporate groups and the negotiating prowess of individual financial administrations. Concerning relief obligation location (c), leveraging insights from the October 12, 2020, Blueprint, Part 7 elucidates which company or companies within a group bear the Amount A tax, and which states—where these companies previously paid taxes—must surrender their tax revenue via exemption or tax credit. A two-tiered procedure is employed: (1) identifying “paying entities” and (2) methods for eradicating double taxation. Regarding intra-group allocation of Amount A amounts, the rationale seems to apply the same formula at the individual company or production state level, i.e., the formula profit before tax: revenue. Although discussed, the OECD dismisses this approach partly due to the manipulability of intra-group transactions, understanding that the allocation and amount of sales returns can be manipulated by, for instance, inserting additional group companies into the service chain.[12]

The OECD’s Four-Step Test

In Blueprint paragraphs 560 and following, the OECD proposes a four-step test to pinpoint the paying entity:

Step 1 – Activities Test (par. 579+) strives to identify companies significantly contributing to value creation via a traditional function and risk analysis, despite inherent difficulties in evaluation and longstanding conflicts in operational audits. With an increased number of participants, perhaps numerous market and producing states, the test’s applicability is questionable due to its demanding time requirements. Compromises are often formed in extensive negotiations.

Step 2 – Profitability Test (par. 592+) scrutinizes if a company can shoulder the Amount A tax, assessed via financial statement profit determination. A super-profit related to the company is discerned: super-profit is the profit portion surpassing a specified percentage of outlays for wages and tangible economic goods within a tax jurisdiction (substance carve-out). Profit, adjusted for tax expenses, dividend income, and similar positions, should use data from the HB 2 and the P&L 2 (par. 596). However, nuances in profit preservation determination and substance carve-out application invite complexities and potential disparities in book values of assets. Notably, internally produced intangible assets, even if aligning with Nexus approach post-BEPS 1.0, are disregarded. Detailed investigations and concise regulations are imperative to shape the allocation effects of the substance carve-out as precisely as possible.

Step 3 – Market Connection Priority Test (par. 599) attempts to discern which market relationships originate the super-profit of the potential paying entity. Interestingly, super-profit doesn’t compulsorily stem from the company having (distribution) contact with the market state, recognized in the Blueprint. Various entities’ contributions (e.g., one’s trademark, another’s know-how, or a third’s production performance) to market success in a particular market state can precipitate classic transfer pricing examination queries. Doubts linger on whether the principles articulated in par. 604 can be sufficiently practical and low-conflict, with challenges amplifying when multiple paying entities are connected and allocation decisions are necessitated.[13]

Step 4 – Pro Rata Allocation: Post-market connection test application, the relief obligation assignment transpires in dual phases: initially, Amount A is distributed to entities with adequate market connection, with a defined volume of relief retained; any residual Amount A relief volume is allocated proportionally. The steps are complex and their evaluative judgment dependence inherently holds a significant dispute potential, further propelled by a “tilting mechanism” due to marginally varying standards application based on perspective. Contradictions are apparent, especially considering that, per paragraph 611, the company’s sales profit margin might potentially be consulted, despite its susceptibility to manipulation as dismissed in paragraph 574. Even after the relief mechanism application, at least the tax on the routine profit share and a part “X” of the residual profit should remain for the resident state of the paying entity, as accentuated in paragraphs 608 and 610. This concise assessment underscores key facets of each step, with their inherent complexities and potential contention points in application, emphasizing that practical, low-conflict implementation is aspirational yet doubtfully achieved due to inherent evaluative requirements and potential manipulations amidst interconnected, multilateral financial obligations and allocations.[14]

In discerning Amount A, which crucially implies assigning 25% of the assessed basis exceeding a 10% return, one might assume the tax right of the resident state is unburdened up to not only the 10% routine profit share but also the further 75% of the exceeding profit. However, the foundational formula refers to group profit, which is computed distinctly from the commercial balance sheet profit and even more divergently from the tax balance sheet profit of the paying entity. Paragraph 613 delves into alternatives for situations where a company cannot exhibit a market reference or has inadequate profits to bear the Amount A tax, contemplating reducing the taxable Amount A or alternatively tapping into the routine profit of paying entities. The Blueprint outlines the allocation of relief obligations from a company-centric perspective, deriving the obligated tax authority from the paying entities’ tax residency. However, this perspective raises two pivotal issues:

The supposed excess profit might be subjected to general income tax in other states, especially where business establishments exist, and not only forfeited in the residency state, which might then demand the relief mechanism to be proportionally borne by the states with business establishments – a consideration unaddressed in the Blueprint.

Additional companies, possibly yielding different, potentially significantly lower, returns might exist in the paying entity’s resident state. Collective consideration might subsequently yield a lower excess return and thereby a reduced relief obligation.[15]

To avert arbitrary outcomes and excessive demands from individual states, the relevant excess profit and allocatable relief volume must be related to states, formulated from the results of companies tax-resident in the state minus the results from outbound establishments and plus the results from inbound establishments. While the Country by Country Report (CbCR), per § 138a AO, initially seems apt for attaining transparent and internationally accepted state allocation, it lacks the wage sum necessary for the substance carve-out and, as per practical reports, is variably utilized, suggesting further standardization is prudent.[16]

The Technique to Avoid Double Taxation a) Relief through Tax Exemption or Tax Credit

In the eloquent script of taxation intricacies delineated in paragraphs 620 et seq. of the Blueprint, a bifurcation of methods—exemption and credit—is discerned as pathways to avert the double taxation quandary. Each market state, in its sovereign discretion, determines its tax rate, potentially oscillating above or beneath the German corporate tax (KSt) rate of 15%, with an anticipated average of approximately 26%, as per OECD estimates (para. 622).

The disparity in tax rates conjures a complex tableau, particularly through the exemption method. If Germany, serving as the production state, were to exempt Amount A (generated in the market state) from the 15% German KSt, whilst the market state enforces a mere 7%, it would inadvertently forge a new privilege. This casts a dimming shadow on the BEPS 2.0 project and becomes a political encumbrance upon the national implementation legislation.

The credit method seamlessly navigates through the predicaments of lower tax rates, providing consummate relief, albeit under the condition that the foreign tax rate remains beneath the German KSt rate of 15%. Notwithstanding, in the maelstrom of higher tax rates, a threat of credit loss looms, exacerbated if a credit against the trade tax (GewSt) remains unattainable. An analogous scenario afflicts the exemption method, if said exemption pertains solely to the KSt and neglects the GewSt.

Moreover, paras. 628 f. unveil an OECD discourse on the ubiquitous country-per-country limitation, pertinent to the credit method. Herewith, the apex for tax credit must be distinctly ascertained for each source state, prohibiting any offset of credit surpluses with lingering credit potentials from alternative source states.

Further complexities arise in loss management. The Amount A concept recognizes a unified loss carryforward at either group or segment level (para. 472 et seq.), excluding the role of individual or intra-state loss carryforwards and casting ambiguity upon the consideration of individual company losses in identifying entities shouldering the Amount A tax (para. 486 f, 618 f.).

Turning to the Marketing and Distribution Profits Safe Harbor (MDSH) explored in paragraphs 643 ff., the nexus is formed of three critical elements (Para. 535 f.): (1) Amount A attributable to the state, (2) a delineated routine profit for domestic marketing and sales activities—possibly augmented by a regional and industry-related surcharge, and (3) the “actual” profit from domestic marketing and sales activities, discerned per conventional transfer pricing principles.

The MDSH takes effect only when element (3) surpasses (2). Intriguingly, if (3) eclipses (2) but not the sum of (1) and (2), Amount A is curtailed by the excess of the sum of (1) and (2) over (3). Should (3) equal or exceed the aggregate of (1) and (2), Amount A is nullified for the pertinent state, and taxation is conducted pursuant to traditional principles.

Ensuring fiscal judiciousness, the MDSH is conceived to be executed on a state-by-state basis, contemplating consolidation of multiple companies or permanent establishments within a singular state. The essence of this methodology seeks to preserve the equity and simplicity of cross-border taxation, albeit amidst the omnipresent challenges of varying global tax regimes.[17]

Interim Conclusion and Simplification Proposals a) Need for Standardization

The redistribution mechanism proves to be significantly dependent on valuation and is complex. Notable ambiguities and conflict potentials exist both in determining the benefit volumes for market states (Section II.1) and the distribution of relief obligations among the production states (II.2). As far as Pillar One distinguishes between routine profit and residual profit, it is noticeable that this demarcation is carried out according to three different standards:

(1) For determining the overall Amount A at the group level, a profit-revenue ratio (profit margin) is used; (2) In identifying the paying entity and thus the state obligated for relief, the routine profit limit is supposed to be found using a four-step concept, including a substance carve-out (Section II.2.b); (3) For establishing the “marketing and distribution profits safe harbor” (MDSH), a state-related profit margin is referred to again, but only certain types of revenue are intended to be considered (Section II.3.b).

Regarding the determination of the paying entity and the state obliged to provide relief (2), there is much to suggest restricting the four-step test to Step 2 – profit before taxes minus substance carve-out – and conducting the distribution of relief obligations in proportion to the remaining residual profits thereafter. Furthermore, it is imperative that the relief mechanism is not designed to be company-related but rather state-related (Section II.2.d).[18]

Specifically: Simplification of the Marketing and Distribution Profits Safe Harbor

Determining the MDSH (3) is relatively complicated in the Blueprint and is endowed with contention-prone individual valuations concerning the level of yield. To simplify, it is suggested here that the MDSH be derived by calculating backward from the corporate group’s profit margin. c) Relationship to Regular Profit Taxation The production states do not want to relinquish more of their tax substrate than necessary; the corporate group wishes to achieve (at least) full relief. This gives rise to three issues concerning:

(1) the differences between group profit and (aggregated) tax balance sheet results (2) varying tax rates (3) as well as procedural technique questions building on (1) and (2).

Regarding (1): The OECD concept very consciously relies on the commercial and not the tax profit determination because the tax profit calculation rules appear too varied between states (par. 596) and tax law moreover does not know comprehensive determination of a group profit. This harbors the risk that individual companies or states are allocated commercial profits that do not exist tax-wise to this extent. The possible reasons for this are known to be extremely diverse. A stark case would be an incorporation tax-wise to book values, commercially but to market values, wherein the incorporation profit is neutralized only at the level of the group balance sheet. One might consider the idea of a shadow calculation, in which it is retraced whether the tax assessment basis remaining after relief actually remains untouched with respect to the routine profit and a reasonable share of the excess profit. Such a shadow examination would, however, give effect to the tax peculiarities of the individual states once again and thereby fundamentally endanger the international consensus on Pillar One.[19] The international community of states will hardly want to enter into discussions about the entire range of national deviations between the commercial balance and tax balance. A punctually limited counter-correction – as in the aforementioned case of the incorporation profit only present in the commercial balance – would be conceivable, but would also have to capture the reverse effects in the following years. Realistic would be the path hinted at in par. 610 of the Blueprint of a sacrifice limit, which is oriented towards the commercially accounted routine profit, possibly increased by “X” percent of the excess profit. The sacrifice limit should be related to a minimum tax rate, because states with a lower tax rate do not appear worthy of protection in this regard. E.g., a veto right could be granted to the state seen as obligated to provide relief, as far as, with the intended obligation, verifiably a tax income of less than e.g. 15% of the aforementioned sacrifice limit would remain to it over a period of perhaps three years. Regarding (2): Both the market states and the states obligated to provide relief will apply their own and not mutually coordinated tax rates. A royal path out of this entanglement is not readily discernible. The market connection priority test should definitely be waived. Perhaps the market states can come to terms with establishing certain minimum tax rates, and the relief-obliged states with the average consideration. Regarding (3) – Procedural Technique: The relief can be carried out both within the scope of individual assessment and independent of assessment. The choice between these options and their respective design has significant effects on the primary horizontal and vertical financial equalization and will therefore be discussed in the following section concerning the financial constitutional framework conditions of the implementation of Pillar One.

2.

Constitutional and tax policy aspects

Taxation of Amount A within the framework of corporate income tax with regard of its financial constitutional permissibility

The scope of the Amount A redistribution is limited to the world’s largest and most profitable multinational corporations, whose excess profits are intended to be partially shifted to the market states for income tax purposes. Therefore, in inbound situations where Germany acts as a market state with assigned Amount A, it is reasonable to levy the corresponding tax as corporate income tax.[20]

However, integrating the Amount A tax into the existing corporate income tax would only make sense if the Amount A tax can also be constitutionally qualified as corporate income tax. There may be concerns in this regard, as the taxation of Amount A differs conceptually from traditional corporate income tax in various aspects. Firstly, the determination of the taxable profit does not follow traditional tax accounting principles but starts from a consolidated group balance sheet, which is only subject to relatively few tax-specific adjustments.[21] Secondly, the territorial nexus for the allocation or exercise of taxing rights concerning Amount A is different from traditional corporate income tax.[22]

As a central provision of the subjective tax liability, Section 1 conclusively determines the scope of corporate taxpayers subject to unlimited corporate income tax liability. Like the Income Tax Act (EStG), the Corporate Income Tax Act (KStG) distinguishes between two types of subjective tax liability – unlimited and limited corporate income tax liability. The limited corporate income tax liability is regulated in Section 2. Therefore, in the interplay between Section 1 and Section 2, the provisions determine the circle of taxpayers subject to the KStG and the extent of their corporate income tax liability. Sections 1 and 2 are not restricted by Section 3 I. Section 3 I serves to distinguish between income tax and corporate income tax and thus establishes a fallback provision to avoid any undue gaps in the system of taxpayers.[23] Scope of subjective tax liability. According to Section 1(II), the scope of unlimited corporate income tax liability encompasses all domestic and foreign income (the worldwide income principle) unless restricted by personal (e.g., Section 5(I) No. 1) or material tax exemptions (e.g., Section 8b or by double taxation agreements). Section 1(III), which corresponds to the wording of the income tax domestic concept in Section 1(I) sentence 2 of the EStG, makes statements about the concept of “domestic” without conclusively defining it. A comparable regulation to Section 1 has existed at its core since the introduction of a separate law for taxing corporations in 1920. The wording of Section 1 has remained essentially unchanged since its revision by the KStG on October 16, 1934. Changes to Section 1 have only been made regularly when there have been civil law changes concerning corporate taxpayers, requiring adaptations to the list in Section 1 (e.g., the deletion of colonial companies by the Corporation Tax Amendment Act of February 25, 1992, and mining associations by the Tax Reduction Act of December 22, 1999, as well as the addition of mutual pension funds by the EU Merger Act of December 9, 1994). The amendment to Section 1 was only significantly expanded by the Foreign Account Tax Compliance Act of December 7, 2006. By adding the word “in particular” to Section 1(I) No. 1, it was clarified that the list of capital companies mentioned in Section 1(I) No. 1 is not an exhaustive enumeration of corporate forms. As a result, it is undisputed since then, at least for capital companies established under the law of another EU member state or EEA state, that the KStG[24] also follows the recognition of the legal capacity and legal personality of foreign companies. An expansion of the concept of “domestic” was also made. After the Tax Amendment Act of 1973 was introduced, the taxation of activities in the area of Germany’s share of the continental shelf was first regulated by law. Subsequently, the Income Tax Amendment Act of 2008 extended the concept of “domestic” in Section 1(III) to include energy generation using renewable energies in the area of Germany’s share of the continental shelf. By the Tax Amendment Act of July 25, 2014, the concept of “domestic” was further expanded to include the exclusive economic zone, with a view to energy generation facilities located there. With the reform of the Income Tax Act in 2015, following the proposal of the Federal Council, there was a further extension of the income tax concept for all taxable rights derived from the United Nations Convention on the Law of the Sea on December 10, 1982.

Purpose and scope of the provision.

Fundamentals of the corporate income tax system. Separation principle

Unlike partnerships, corporations are treated as independent taxpayers for the taxation of their income. The so-called separation principle applies to the relationship between the corporation and the shareholder, meaning that the corporation and the shareholder have separate tax capacities and, therefore, their taxability is evaluated independently. Regardless of the legal capacity that also applies to partnerships, the taxation of income from partnerships is based on the principle of joint realization of the circumstances. Such jointly realized income is attributed directly to the partner for income tax (ESt) or corporate income tax (KSt) purposes – the so-called transparency principle.[25] The purpose of the separation principle is constitutionally justified for the taxation of corporate profits and dividends (i.e., the classical system). However, in Germany, such a classical system of double taxation has only existed since the introduction of the Corporation Tax Act in 1920 until 1952. Since 1953, the double taxation of distributed profits has been fully or partially mitigated. Full imputation procedure for corporate income tax (KSt). Through the Corporation Tax Act of 1977, the full imputation procedure for corporate income tax (KSt) was introduced in Germany, which significantly shaped the taxation of corporations and shareholders until 2001.[26] The corporate income tax (KSt) payable by the corporation was credited to the shareholder’s tax liability as if it were their own tax prepayment, thus largely eliminating economic double taxation. Certain parts of this system for avoiding economic double taxation are still in effect in transitional regulations (see Sections 37, 38) until 2019. Partial or semi-income procedure and withholding tax. Due to justified doubts about its compatibility with European Union law, the full imputation procedure for corporate income tax (KSt) was replaced by the partial income procedure following the limitation of the full imputation procedure to the domestic territory by the Corporate Tax Reduction Act of October 23, 2000. Instead of a corporate income tax credit, economic double taxation for natural persons was mitigated by a 50% deduction, and for corporations, there was a (de facto) 95% exemption. By the Corporate Tax Amendment Act of August 14, 2007, the partial income procedure was further developed into the semi-income procedure and supplemented with a system of withholding tax on capital gains for private investors. Under the current semi-income procedure, dividends are tax-exempt in the business area for natural persons at 40% of the income (Section 3 No. 40 letter d of the Income Tax Act) and are, therefore, 60% tax-deductible with expenses related to the dividends (Section 3c(II) of the Income Tax Act). For natural persons as private investors, dividends are generally subject to a withholding tax at a rate of 25% (Sections 2(Vb), 32d, 43(V) of the Income Tax Act). For corporations, the (de facto) 95% exemption according to Section 8b of the Corporation Tax Act remains unchanged for both the business and non-business areas. Legislation authority, revenue authority, and tax administration authority. According to Article 106(III) of the Basic Law (GG), the revenue authority for corporate income tax lies with the federal government and the states (joint taxation).[27] For joint taxes, the federal government has concurrent legislative authority (Article 105(II) GG). The tax administration authority for corporate income tax lies with the states according to Article 108 GG. The transfer of tax administration authority to a federal agency requires an explicit federal statutory regulation according to Article 108(IV) GG (Section 5(I) of the Fiscal Equalization Act). 2. Significance of Section 1. Conclusive enumeration of corporate income tax subjects. Section 1 is the core provision for determining the subjective corporate income tax liability.[28] The regulation provides a conclusive list in Section 1(I) Nos. 1-6 of the types of corporations, associations, and pooled assets with their management or seat in the country are subject to unlimited corporate income tax liability. At the same time, it differentiates unlimited tax liability from limited tax liability within the meaning of Section 2. The list of the term “corporations” in Section 1(I) No. 1, which was considered conclusive according to the jurisdiction of the Federal Fiscal Court (BFH), was legally expanded by the Corporate Tax Amendment Act (SEStEG) as a result of the ECJ’s case law regarding the recognition of foreign corporations.[29] Lack of legal capacity in civil law. According to Sections 1 to 3, a legal entity without civil law capacity can also be subject to unlimited or limited corporate income tax liability and, therefore, a carrier of independent tax rights and obligations. As a result, the Corporation Tax Act is to some extent detached from civil law capacity. No taxation under the Corporation Tax Act. If there is no corporate income tax liability according to Section 1, no taxation will be carried out under the Corporation Tax Act, provided that the requirements of Section 2 are also not met. In particular, legal entities of public law are not subject to unlimited tax liability. No significance for the applicability of other provisions of the Corporation Tax Act. The significance of Section 1 – as well as Section 2 – as introductory provisions in the Corporation Tax Act is limited to the conclusive determination of the circle of taxpayers subject to corporate income tax. This is distinct from the question of whether the other provisions of the Corporation Tax Act can also be applied in the absence of domestic corporate income tax liability.[30] This critical issue concerns the scope of the subjective application of other regulations in the Corporation Tax Act, to the extent that they are not expressly limited to unlimited (e.g., Section 8(II)) or certain limited (e.g., Section 5(II) No. 2) corporate income tax subjects. A lack of corporate income tax liability according to Sections 1 or 2 does not automatically result in the exclusion of the application of other provisions of the Corporation Tax Act (e.g., Section 12(III), Section 27(VIII), or Section 32a). In most cases, this does not concern taxation at the corporate level, but rather the taxation of a shareholder who is subject to income tax or corporate income tax in the country. This is especially evident in the example of Section 32a. According to this provision, a tax assessment can also be issued, revoked, or changed even if neither the shareholder (e.g., a resident natural person) nor the distributing corporation (e.g., a foreign corporation) are subject to domestic corporate income tax.[31] It does not depend on where entrepreneurial value creation occurred and contributed to profit generation. Instead, it focuses on the national market where the taxable company enables final consumption. Thirdly, the Amount A tax may largely deviate from the traditional principle of individual taxation, where each legal entity within the meaning of Section 1 para. 1, 2 of the Corporate Income Tax Act (KStG) is generally treated as a separate corporate income tax entity.

However, upon closer examination, these peculiarities of the Amount A tax do not contradict its integration into corporate income tax from a constitutional perspective. The Federal Constitutional Court (BVerfG) understands the individual taxes and types of taxes listed in Art. 106 of the Basic Law (GG) as typical concepts, according to the prevailing opinion. Therefore, newly introduced taxes must be compared to see if they correspond to the type of a traditional tax.[32]

The characteristic features that define the type of tax should generally be derived from traditional German tax law.[33] To prevent ossification of the constitutional financial framework, the BVerfG correctly demands only a general conformity regarding essential characteristics that shape the type of tax. Within this framework, the legislator can largely and flexibly shape new and existing taxes, even deviating from historical models.[34] Specifically for direct corporate income taxes, and thus also for corporate income tax, it is characteristic and typical that they “specifically access entrepreneurial profits or a typified assumed entrepreneurial profit.”[35] The corporate income tax, in the sense of Art. 106 para. 3 sentence 1, 2nd case of the German Basic Law (GG), covers the income of taxpayers operating in the legal form of a legal entity.[36] Within this framework defined by the type, it is then left to the legislator’s constitutional discretion to determine and specify the originally economic concept of income (referring to periodically recorded net asset increases or periodically generated net proceeds). In this regard, the legislator is not constitutionally bound to a specific or uniform concept of profit as the basis for taxable income. This is evidenced, for example, by the constitutionally recognized classical duality in income determination for income tax. Similarly, the flexible framework of corporate income tax is open to elements of group taxation, as already demonstrated to some extent in the traditional institute of tax-consolidated groups according to §§ 14 ff. of the Corporate Income Tax Act (KStG). Incorporating Amount A into the established corporate income tax would be constitutionally feasible in this context. The amount allocated to the market state for taxation is based on a commercial balance sheet’s profit and loss statement and is thus defined as a net or profit figure. In this respect, the Amount A tax differs significantly, particularly from the Digital Services Tax previously proposed by the EU Commission, which is based on gross revenues from highly digitalized business models. At the international level, the Organisation for Economic Co-operation and Development (OECD) acknowledged in its 2015 report (Action 1 report) as part of the OECD/G20 project “Base Erosion and Profit Shifting (BEPS)” that digitalization and resulting business models pose challenges to international taxation. Building on this report, the G20 finance ministers expressed their support for the OECD’s work on taxation and digitalization. Subsequently, the OECD prepared an interim report on the taxation of the digital economy, which was presented to the G20 finance ministers in March 2018. This report analyzes the need to adapt the international tax system to the digitalization of the economy and identifies aspects that countries should consider when taking provisional measures to address tax challenges arising from digitalization.On the European Union level, these challenges were addressed in the Commission’s Communication “A Fair and Efficient Tax System in the European Union for the Single Market” adopted on September 21, 2017. The current initiative was also mentioned in President Juncker’s letter of intent, presented alongside his State of the Union address in 2017. Several EU finance ministers signed a political declaration titled “Joint Initiative on the Taxation of Companies Operating in the Digital Economy,” advocating for EU law-compatible and effective solutions based on the concept of introducing a so-called “digital services tax” on revenues generated by digital companies in Europe. As a result, the European Council adopted conclusions on October 19, 2017, highlighting the “need for an effective and fair tax system adapted to the digital age.” Furthermore, the ECOFIN Council conclusions on December 5, 2017, acknowledged the interest of many member states in temporary measures, such as a tax on revenues from digital activities in the Union, and considered the possibility of these measures being examined by the Commission.[37]The fact that the accounting and adjustment rules relevant for calculating Amount A may not align with conventional German tax accounting but would be somewhat disparate within the KStG does not call into question the classification of the Amount A tax as an income tax. Likewise, the associated partial shift of corporate income tax towards genuine group taxation is not inherently characteristic and thus falls within the legislator’s constitutional discretion. Finally, the territorial nexus for asserting national taxing authority, in the case of Amount A, i.e., the market nexus determined by typified rules, is not inherently characteristic either and is therefore subject to the legislator’s discretion. Moreover, the traditional catalog of § 49 para. 1 of the Income Tax Act (EStG) already partially incorporates demand-side assertion of taxing rights through the source principle.

Apportionment Issues

If the Amount A tax were integrated into corporate income tax, there would be a need to establish a key for horizontal distribution of tax revenue among the federal states in “inbound” situations. The regular standard of local collection provided in the German Basic Law is not suitable for this context due to the lack of physical presence of taxpayers. Instead, an alternative standard based on the “actual tax capacity” of each state must be determined in the Apportionment Act. The allocation should reflect the contribution made by each federal state to value creation and profit realization in line with the logic of assigning Amount A taxation rights to market states. Using the value-added tax (VAT) as a basis for the apportionment rule could be a logical approach since both the VAT and Amount A allocation rules focus on the destination of presumed final consumption. In this case, any share of federal states in the Amount A revenue would be distributed among them based on the ratio of their respective populations, similar to the Financial Equalization Act.[38] The tax distribution in the federal state is the centerpiece of the financial constitution. The allocation of funds between the federal government and the states is a key decision for the distribution of power in the federal state (see footnote 20 below). Overall, the provisions of Articles 106-107 of the Basic Law (GG) appear overly complex. This is especially true for Article 106 GG, the most extensive and probably the most complicated article of the Basic Law, which deals with the central tax distribution. This complexity is also due to the difficulties in organizing sufficient majorities for any constitutional amendments regarding the financial central issue of German federalism. Exceptions, counter-exceptions, and a lack of clear criteria are detrimental to transparency and comprehensibility of the solutions. For example, Articles 106a and 106b GG no longer even attempt normative integration into the system of fiscal equalization. The term “fiscal equalization” in legal literature and jurisprudence refers to the distribution of public revenues among the individual territorial entities. This narrow understanding of fiscal equalization relates specifically to the content of Articles 106 to 107 GG and, therefore, the distribution of tax revenues. However, some hold the view that, in addition to revenue distribution, the allocation of tasks and spending responsibilities (described in § 3) also belong to the complex of fiscal equalization (also known as “passive fiscal equalization”). Such a broad understanding of the term should be rejected because revenue distribution between different entities inherently presupposes a corresponding division of tasks.[39] Although the constitutional distribution of responsibilities already includes elements of fiscal equalization, it is merely a prerequisite and determining factor for fiscal equalization, not the subject of financial constitution regulations itself.[40]

Amendments to the Apportionment Act would be necessary to implement this approach.[41]

The issues underlying the new deterritorialized law; global law.

In the contrast between national law and global economy, deterritorialized law, while freeing itself from specific places and spaces, cannot be limited to producing a gradual erosion of state sovereignty by adopting a negative or dissolutive approach to law. Instead, it should lead to the construction of systems of rules and legal models that give rise to a “global law.” The global legal order is not in a primitive stage of development, but it comprises binding norms, institutional frameworks, and legal relationships among organs, entities, subjects, and judicial and public powers adhering to the principles of transparency and justice. The institutional frameworks appear horizontally and pluralistic, often involving new international bodies (almost two thousand exist), which establish rules that can directly impact domestic legal systems or be mediated through internal legal instruments (such as ratification or the implementation of international government acts).[42]

As regulatory models transform, international institutions and organizations are called to operate with new logics and methods, expressing shared rules to overcome particularisms and conflicts while focusing on common interests and values. The new global tax law becomes crucial in addressing fiscal issues comprehensively, considering not only conflicts between taxing powers but also the planet’s emergencies, such as unequal resource distribution, social cohesion, responsible, conscious, balanced, and sustainable development. This perspective counters the regulatory impasse that a globalized economy may desire (“empty law, full economy”) by replacing flexible and evolving behavioral models with formalized, certain, stable, and shared rules, thereby minimizing revenue and maximizing profit. This approach allows politics to regain its central role in guiding the economy, promoting redistribution, social justice, and human dignity through fiscal instruments.

The equitable distribution of resources should guide the development and implementation of the legal-tax framework, aiming to combat inequalities as a crucial condition for social cohesion and peace among nations. Overcoming the predatory logic that historically shaped relationships between states, both during colonial and post-colonial periods, the international community (rich, emerging, and developing countries) must strongly address international tax evasion and erosion of tax bases. It should define new tax collection models and rules for resource allocation, customs, international trade, energy taxation, environmental taxation, and eco-incentives. This task is challenging, as powerful nations may seek to impose rules that better serve their interests, potentially leading to a new and subtle legal colonialism, operating according to the law of the strongest, sometimes unwritten and at times imposed and formalized, respecting the formal principle of legality in taxation, established in the constitutions of most countries worldwide.[43]Positive signs can be observed due to efforts made by organizations like the Organisation for Economic Co-operation and Development (OECD) and the Group of Seven (G7), Group of Twenty (G20), and the World Trade Organization (WTO). They have proposed measures to address tax challenges related to the digital economy, tax transparency, cooperation between tax administrations, counteracting base erosion, tax avoidance, and tax evasion. The BEPS project,[44] in particular, plays a significant role in combating aggressive tax planning and offers solutions on a global and European level. Among the various aspects, digital taxation is an important area characterized by international tax avoidance. To address this, global tax criteria should be defined, possibly through negotiations with the EU, adopting a multilateral convention to allocate tax jurisdiction based on the functions performed by multinational corporations in different countries or considering shared localization criteria. The BEPS experience[45] sheds light on the relationship between global law and European law, as they stimulate and integrate with each other. The BEPS[46] actions have been implemented in supranational law through directives adopted by individual states.[47]

3. At the end of 2021, the EU Commission presented a proposal to amend the EU’s own resources system. According to this proposal, new own resources would be provided for the benefit of the EU to enable the repayment of debts incurred for financing the “NextGenerationEU recovery instrument”^[48] on the capital market.^[49] The proposal foresees that the EU will participate in the revenues generated by the Member States from the taxation of Amount A to the extent that results from the application of a uniform call rate of 15% on the share of the residual profit of multinational companies allocated to the Member States under Pillar One[50] and the future corresponding EU implementing directive.[51] The wording suggests that the Member States are required to contribute an equivalent to the standardized gross revenue from the allocation of Amount A without being able to offset any revenue losses resulting from the obligation to avoid double taxation. If this proposal for the EU to share in the revenue from the Amount A tax is adopted, the Amount A tax collected by Germany,[52] assuming an unchanged corporate tax rate of 15%, would be a pass-through item from the perspective of the overall state. Internally, the corresponding payment obligation would fall solely on the federal government. However, this fiscal special need of the federal government would only be partly offset by a 50% revenue sharing in the collection of the Amount A tax, which is a non-self-standing element of corporate income tax. Therefore, the federal government would need to provide funds generated from other sources for the EU own resources calculated based on Amount A. In contrast, the states would experience a corresponding increase in revenue (subject to participation in the resulting revenue loss from avoiding double taxation). This imbalance rooted in the German fiscal federalism could only be addressed through a re-evaluation of the distribution of VAT shares between the federal government and the states according to Art. 106 para. 4 GG, if the Amount A tax were integrated into corporate income tax. It would be less complex and more targeted in this case to design the Amount A tax as a supplementary levy to corporate income tax, as defined in Art. 106 para. 1 No. 6 of the German Basic Law (GG), to the extent that the federal government has to pass on the corresponding tax revenue to the EU.[53] If the plans of the EU Commission were to be realized, this would imply a fifteen percent Amount A supplementary levy. Consequently, taxation of Amount A under the Corporate Income Tax Act (KStG) would be relinquished.[54] Moreover, only the (gross) revenue from the allocation of additional tax substrate in the form of Amount A to the Federal Republic of Germany would be subject to the Amount A supplementary levy. However, the relief obligation associated with the implementation of Pillar One for foreign Amount A tax would not be integrated into the provisions of the supplementary levy.[55] This is not recommended, as the new EU own resources, according to the Commission’s proposal, should also be determined based on gross revenue without deduction of relief amounts. Furthermore, there would be a technical difficulty in providing exemptions or credits within the framework of the supplementary levy since it does not capture the profits determined based on traditional territorial connecting factors and transfer pricing rules.[56] The complete collection of the Amount A tax as a separate additional tax solely accruing to the federal government requires that such a tax could be classified under the type of the supplementary levy as defined in Art. 106 para. 1 No. 6 GG, due to the regulatory and limiting function of the constitutional financial framework. The Federal Constitutional Court (BVerfG) has already named the essential characteristics of a supplementary levy nearly 50 years ago: Firstly, the revenue from the levy must cover a special and temporary financial need of the federal government. Secondly, the tax base of community taxes, specifically income taxes, must not be eroded. Thirdly, the supplementary levy must have a certain conceptual accessory to income tax or corporate income tax.[57]

(1) The requirement for a special and temporary reason for imposing a supplementary levy is not explicitly stated in the wording of Art. 106 para. 1 No. 6 GG.[58] However, it is commonly derived from its legislative history. The category of the supplementary levy was added to the catalog of Art. 106 para. 1 GG later through the Financial Constitution Act of 1955.[59] During the legislative process, it was expressed that the supplementary levy was intended, among other things, to “cover spikes in demand in the federal budget that cannot be offset otherwise.”[60] Additionally, in the materials related to the amendment of the financial constitution, reference was made to the parallel legislative proposal for the introduction of a supplementary levy, where it was stated that the specific proposed tax was “not intended for the long term, but only for exceptional situations.”[61]However, the Federal Constitutional Court (BVerfG) has convincingly argued that these “indefinite” statements cannot be interpreted in a way that suggests that the supplementary levy should only be collected for a very short period or that it must be explicitly limited. In the literature, however, it is generally and rightly assumed that the financial constitutional type of the supplementary levy requires a temporary additional financial need of the federal government for a specific reason.[62] In this regard, an Amount A supplementary levy under the premise of an obligation of the federal government to pass on the generated tax revenue to the EU would easily meet these requirements.[63]

The revenue generated by the Amount A tax would solely result in an additional financial need for the federal government.[64] This need would also be foreseeable and temporary because the EU intends to use these specific own resources for the repayment of debts raised in the capital market for the “NextGenerationEU” recovery instrument, which, in turn, is designed as “historically unique,”[65] suggesting that the resulting refinancing need would be limited in time.[66]Moreover, even if an “acute” need were to be demanded, it could not be denied because the federal government currently has no financial leeway for additional non-debt-financed expenditures due to the enormous costs of measures to contain fundamental risks for the state and society (climate change, new security policy situation). (2) The Federal Constitutional Court (BVerfG) also deduces from the historical context the requirement that the supplementary levy must not “undermine the income and corporation tax that is jointly owed to the federal and state governments.”[67] In particular, the supplementary levy as a pure federal tax should not impair the productivity of these community taxes to the detriment of the states.[68] The literature specifies that this threshold would not be exceeded, at least with a supplementary levy revenue in the form of the solidarity surcharge, i.e., 5.5% of income and corporate tax.[69] An Amount A supplementary levy would foreseeably meet this criterion of (state) fiscal compatibility. Germany is expected to generate an (gross) revenue of around 1.25 billion euros annually from the taxation of Amount A at 15%.[70] Scenario “US 3”[71] comes closest to the threshold values used for the personal scope of Pillar One of the international agreement from October 2021. Researchers estimate a gross revenue of approximately 1 billion euros for this scenario. However, this number is based, on the one hand, on a redistribution of only 10% instead of the now agreed 25% of the residual profits, and, on the other hand, on a tax rate of 30% instead of the 15% set for the supplementary levy.This is only a fraction of the total revenue from income and corporate tax, and even in relation to corporate tax revenue, it represents only about 3%. Even if one were to consider that the solidarity surcharge already constitutes another supplementary levy, the combination with an additional Amount A supplementary levy from 2023 or 2024 would not come close to the revenue impact generally considered acceptable before its reform on January 1, 2021. If one were to compare the combined burden of solidarity surcharge and Amount A tax solely to corporate tax revenue, the current percentage would be around 10%. However, it is more reasonable to reference the total revenue from income taxes as a whole, as it is the joint financing base according to Art. 106 para. 3 GG, whose erosion should be prevented.[72] In addition, even with a properly designed Amount A tax, unlike the solidarity surcharge, it would not deepen an existing tax liability.[73] The taxation of Amount A would be applicable in Germany only to the extent that the country cannot currently tax the corresponding shares of profits using traditional connecting factors of international corporate taxation, such as §§ 2 para. 1 KStG and 49 EStG (Income Tax Act) for corporate income tax. According to Art. 106 para. 1 No. 6 GG, any “supplementary levy” must be related to income or corporate tax and considered an independent type of tax while still following the structure and systematics of these taxes.[74] The literature suggests that the supplementary levy can be designed independently within this framework and may target specific income segments.[75] This proposition finds support in the historical model of the “supervisory board members’ surcharges” introduced in 1930, which was a ten percent supplementary levy on the gross remuneration of supervisory board members.[76] An Amount A supplementary levy would easily meet these criteria as it would be designed as a tax on specific elements of corporate income, aligning with the fundamental concept of corporate income tax.[77] However, some voices in the literature critique the Federal Constitutional Court’s somewhat cautious position (BVerfG), arguing that the required accessory nature of the supplementary levy should be narrower, suggesting it should primarily function as a surcharge on income or corporate tax liabilities. Others propose that the supplementary levy should at least coincide with income or corporate tax concerning the basis of assessment. Nonetheless, historical justifications and the Constitution do not support limiting the supplementary levy to a mere surcharge tax. The constitutional amendment legislature did not intend to impose such a restriction, as it referred to income and corporate tax for “technical reasons” when proposing the inclusion of this tax type in Art. 106 para. 1 GG, with the practical suggestion to structure it as a surcharge tax.[78]

The historical function of the supplementary levy suggests that it allows the federal government to have a direct personal tax option, preserving the basic structures of a direct personal income tax. Concerns about modifying the tax burden through the levy possibly infringing upon the political participation rights of federal states are present in the literature. However, the prevailing opinion is that Art. 105 para. 3 GG primarily protects the fiscal interests of the states, and the restrictive requirements for the levy already address this objective. The Federal Constitutional Court and theliterature conclude that Art. 105 para. 3 GG aims to safeguard the states from depleting their financial foundations and tax sources. Therefore, it is unlikely that a levy adhering to its characteristics would undermine the interests protected by Art. 105 para. 3 GG. In summary, there are no substantial objections to solely taxing Amount A through a special federal supplementary levy.[79]

4.From the perspective of the overall state, the allocation of domestic taxing rights for Amount A profits in the “inbound” scenario and the imposition of a relief obligation for Amount A substrates taxed abroad in the “outbound” scenario are two sides of the same coin. However, from the perspective of domestic fiscal federalism, the situation is different.

4.1.Integrating the relief obligation into an Amount A supplementary levy would not be practical. The relief obligation must be applied independently through the assessment of individual domestic companies within the framework of corporate tax. However, this approach poses technical and fiscal policy difficulties.[80] Allocating revenue reductions among federal states based on local wage sums may not accurately reflect which permanent establishments generate Amount A excess profits. Using profitability of permanent establishments as a measure would be more appropriate but challenging to calculate. This could lead to significant shifts in the fiscal equalization system among states, creating winners and losers. The fiscal imbalance would not be compensated by participation in the taxation of Amount A profits, and the distribution of revenue reductions would follow a different logic than the distribution of the tax base among states.[81]

Non-Assessment-Based Relief Procedure

The proposal supports a non-assessment-based, standardized relief procedure for the EU’s[82] Amount A tax, especially if the relief obligation follows a state-based approach. In this case, relief could be provided based on Country-by-Country Reporting (CbCR) data[83], using reported income taxes as a benchmark. Country-by-Country Reporting (CbCR) applies to multinational companies (MCs) whose combined revenue equals or exceeds 750 million euros. CbCR is an integral part of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan 13. Essentially, it requires large multinationals to submit an annual CbC report that provides a detailed breakdown of financial elements according to different jurisdictions. This report offers local tax authorities visibility into revenue, income, tax paid and accrued, employment, capital, retained earnings, tangible assets, and activities. The implementation of CbCR varies among countries and depends on when they integrate it into their respective legal systems. Some countries have already adopted CbC reporting for fiscal years starting on or after January 1, 2016, with the requirement to file the report within 12 months of the relevant year end. CbC reports should be filed 12 months after the fiscal year concludes, starting from the first financial year commencing after January 1, 2016. The primary filing location for CbC reports is the country where the parent company is headquartered (HQ). In cases where the HQ country has not implemented CbCR, multinational companies should designate a surrogate parent entity responsible for filing the report.The purpose of CbCR is to equip tax authorities with essential information to assess transfer pricing risks and make decisions on allocating tax audit resources effectively.

Furthermore, there is a growing trend of additional reporting requirements being introduced in the banking and extractive industries sectors, and other sectors may follow suit. Some jurisdictions are also contemplating the possibility of obligatory public disclosure of CbCR requirements for multinational companies, as seen in the proposal for EU CbCR.[84] A central authority at the federal level could administer the relief procedure, with eligible groups designating a subsidiary under Pillar One to apply for relief on behalf of all domestic entities. The relief would be linked to corporate tax, similar to the special VAT input tax refund procedure.[85] The burden sharing between the federal government and states would be equal, except for the solidarity surcharge. The allocation of the burden among states could be addressed through the apportionment law, possibly using a typifying measure to mitigate fiscal policy distortions. However, using unmodified CbCR data may provide a lump-sum relief for trade tax, raising questions about its appropriateness and feasibility in collection.[86] The impact of Pillar 1 on trade tax would also need to be explored for both “inbound” scenarios and the relief obligation for foreign Amount A taxes.[87]

Taxation of Amount A

The trade tax assessment of Amount A in “inbound” scenarios would hardly be reconcilable with the constitutional concept of this tax, and, from the perspective of the Federal Constitutional Court (BVerfG), would not align with its underlying rationale.

Trade tax has been designed and understood as a real estate tax since its historical origins; this tax type has been recognized by the fiscal constitution – initially, still explicitly. As such, trade tax is linked to the tax object “business operation.” Over time, with its reduction to the taxable profit as the only remaining taxable item, it has evolved into an objectivized income tax. The defining characteristic for the fiscal constitutional type of trade tax is still its linkage to the profitability of a business operation or enterprise operated domestically. Despite the inclusion of itinerant business operations since 1951,[88] the typical characteristic is still the regular spatial connection of the business operation to a specific domestic municipality, usually through a branch or physical establishment.[89] This is closely related to its original justification based on the equivalence tax principle: as per the historical legislator’s understanding, the presence of business operations incurs special burdens and expenses for the primarily tax-entitled municipalities, and, therefore, they receive tax compensation in the form of trade tax. It is disputed whether the traditional equivalence principle can still be used today as a system-constituting guiding principle or internal justification for trade tax. If one agrees with the Federal Constitutional Court (BVerfG)[90] and some parts of the literature, the inclusion of Amount A in trade tax would be considered an inconsistent and arbitrary deviation from this fundamental concept, making it incompatible with the principle of equality. As discussed earlier, the international allocation of taxation rights regarding Amount A is not based on the location of the company’s value creation but solely on the presumed sales market. Therefore, justifying the taxation of Amount A under the traditional rationale of trade tax, as a compensation for infrastructure burdens, costs of public services, etc., would not be possible. Similarly, if one completely denies the legitimacy of the equivalence principle for trade tax, its collection as a special income tax could only be justified based on its mention in the fiscal constitution (Art. 106 para. 6 sentence 1 GG).[91]

Article 106 paragraph 6 sentence 1 of the German Constitution (Grundgesetz, GG) grants municipalities complete revenue autonomy over property tax and trade tax.[92] Prior to 1997, the term “Realsteuern” (real taxes) was used instead of explicitly listing these taxes. Real taxes are levied based solely on the economic capacity derived from an object, such as a business operation or property, rather than the taxpayer’s personal circumstances. However, since some personal taxes also have object references, distinguishing real taxes was challenging.[93] To prevent legal uncertainty, a constitutional amendment clarified the allocation of revenue authority for property tax and trade tax. This also limited the flexibility of the ordinary legislature since the exhaustive list in Article 106 paragraph 6 sentence 1 GG precludes linking tax liability to other factors.[94] The trade tax is guaranteed to some extent as an economically-related tax, as stated in Article 106 paragraph 6 sentence 1 GG in conjunction with Article 28 paragraph 2 sentence 3 half-sentence 2 GG. Nevertheless, neither the property tax nor the trade tax has formal protection against repeal. Municipalities retain revenue autonomy only if both taxes are actually levied. However, according to Article 28 paragraph 2 sentence 3 half-sentence 2 GG, a revenue source related to economic capacity and subject to individual rates belongs to the foundation of the municipalities’ financial responsibility. Therefore, the trade tax should not be abolished without an alternative. If the federal legislature still abolished both taxes, it would have withdrawn entirely from its tax legislation authority. In this case, municipalities could claim against state legislatures for the introduction of a revenue-related tax with individual rates according to Article 28 paragraph 2 sentence 3 half-sentence 2 GG. In addition to real taxes[95], Article 106 paragraph 6 sentence 1 GG allocates local consumption and expenditure taxes to municipalities. Unlike real taxes, these taxes can be allocated to municipal associations based on state legislation. However, tax collection remains primarily under the jurisdiction of states, according to Article 105 paragraph 2a GG. Nevertheless, local laws and regulations have authorized municipalities or municipal associations to levy local consumption and expenditure taxes, such as amusement tax, beverage tax, dog tax, hunting and fishing tax, second home tax, and gaming machine tax. In Berlin and Hamburg, the revenue from local consumption and expenditure taxes goes to the respective state (Article 106 paragraph 6 sentence 3 GG).However, this presupposes that its design still falls within the traditional tax type of “trade tax.” Without a constitutional amendment, the legislature is prohibited from basing trade tax liability on a reason that has no connection to a domestic business operation. This is precisely what would be necessary to impose trade tax on Amount A.[96]

Relief from Foreign Amount A Tax

However, this does not determine whether, in “outbound” scenarios, trade tax could and should also be included in the mechanism to avoid double taxation of Amount A profits. If so, foreign Amount A tax could potentially be credited against German trade tax.[97]

Considering the logic of Amount A taxation, there is a strong argument for allocating some responsibility to trade tax creditors for financing the relief mechanism in “outbound” cases. Although there has been no definitive determination of specific criteria for determining eligible group entities and, correspondingly, the international allocation of state relief obligations, the 2021 statement indicates that they will generally be based on where the group has generated residual profits according to traditional transfer pricing rules.[98] This stems from the political assessment underlying the concept of Amount A, which holds that the arm’s length principle fails to adequately or completely capture the factors contributing to the creation of excess profits in large, highly profitable corporations, to the detriment of market states. This implies that the residual profits allocated to individual highly profitable group entities based on the functional, asset, and risk allocation (FAR) under the arm’s length principle are “excessive” or that at least a “better,” primary taxing right of the market state exists with regard to a portion of these profits.[99]

As the adjustment of this traditional profit allocation between companies within the corporate group also affects the taxable profit of trade tax due to its connection to corporate tax assessment (§ 7 GewStG), the same reasoning applies to the trade tax liability, making a trade tax relief correspondingly necessary for foreign Amount A taxes. However, the underlying assessments of Amount A contradict the rationale, type, and internal logic of trade tax. [100]Thus, granting trade tax relief for foreign Amount A taxes would create an unsystematic anomaly in the structure of trade tax law. While trade tax does have a structural domestic reference according to § 2 para. 1 sentence 1 GewStG, this does not mean that features realized abroad or profits earned abroad are per se exempt from trade tax.[101] As can be inferred from § 9 No. 3 GewStG, a domestic business operation generally exerts an “attractiveness” for all profits earned in connection with cross-border business activities of the commercial enterprise, as long as these profits are not specifically attributable to value contributions of a foreign branch. Thus, similar to how the residency of the taxpayer allows for the aggregate taxation of all worldwide income in personal taxes, the location of the tax object in Germany allows for the comprehensive assessment of all profits generated worldwide by the business operation, as long as they are not attributable to another – then prioritized based on the internal logic of trade tax – tax object (in the form of a business operation conducted abroad).[102]

The Trade Tax Act (Gewerbesteuer) thus consistently realizes the traditional object tax concept in the territorial delimitation of taxation sovereignty. There is no contradiction to the original equivalence principle of trade tax because, under a typifying approach, even cross-border business activities of the branch municipality can incur local costs or utilize local services. Accordingly, the Trade Tax Act generally does not allow a unilateral offsetting of income taxes incurred abroad against trade tax, contrary to §§ 34c Income Tax Act (EStG) and 26 Corporation Tax Act (KStG).[103]

The concept of double taxation can pose significant challenges for individuals subject to taxation in multiple jurisdictions.[104] To address this issue, many countries have implemented Double Taxation Agreements (DTAs) to prevent double taxation on foreign income. However, in cases where no DTA exists or when a DTA employs the tax credit method, unilateral provisions come into play. In this article, we will explore the significance and necessity of unilateral avoidance of double taxation, particularly through the mechanism of tax credit, as outlined in § 26 in conjunction with § 34c of the Income Tax Act. The provisions of § 26 in conjunction with § 34c of the Income Tax Act serve as the foundation for unilateral measures to avoid double taxation, specifically through the application of tax credits for foreign taxes paid. While the heading of the section (“Taxation of Foreign Income”) might not explicitly indicate it, these provisions are aimed at preventing or mitigating instances of double taxation, particularly when no Double Taxation Agreement exists with the foreign country. Moreover, even in cases where a DTA mandates tax credits, these unilateral provisions still hold relevance. The need for unilateral avoidance of double taxation arises from the legitimate international taxation of worldwide income for individuals subject to unlimited tax liability. When foreign income is earned, it is often taxed in the foreign country due to the territorial connection of the income source. Similarly, individuals subject to limited tax liability may also be subject to taxation on their foreign income in the foreign jurisdiction. However, if a country adopts a strictly territorial taxation policy, the occurrence of double taxation is averted from the outset.[105] This explains why tax credits are generally not provided for individuals subject to limited tax liability, as the obligation to grant tax credits typically falls on foreign countries utilizing the principle of worldwide income to tax income sources in other jurisdictions. Unilateral avoidance of double taxation, as provided by § 26 in conjunction with § 34c of the Income Tax Act, plays a crucial role in mitigating the impact of double taxation on foreign income. Whether in the absence of DTAs or in cases where tax credit methods are employed, these provisions offer a necessary safeguard for taxpayers facing cross-border tax challenges. By understanding the significance and rationale behind these unilateral measures, individuals and businesses can navigate international tax matters with greater clarity and compliance.[106] The fundamental principles of trade tax law recognize the foreign country’s primary taxing right on profits earned abroad by entrepreneurs (§ 5 Trade Tax Act). This leads to a de facto trade tax exemption through reduction (§ 9 No. 3 Trade Tax Act). Therefore, crediting foreign Amount A tax against trade tax would violate the system.[107] Pillar One’s Amount A concept assumes “branch-less” foreign income, exclusively taxed in the foreign country as a presumed market state. Applying the equivalence principle for trade tax justifications would reveal inconsistencies, as trade tax compensates for supply-side aspects, not market maintenance (demand-side).[108] Moreover, exempting domestic Amount A taxation from trade tax, yet not doing so in the outbound scenario, seems inconsistent. Systematically, trade tax relief is unnecessary and wouldn’t breach equality principles. However, the legislature might consider granting relief for foreign Amount A tax due to valid reasons, like avoiding international double taxation.[109] Trade tax has progressively acted as a supplement to reduced corporation tax, moving toward an objective income tax, as recognized by the Federal Constitutional Court (BVerfG). Relief mechanisms based on trade tax assessments would worsen issues, involving individual municipalities, with rights to set trade tax rates, in agreeing on relief allocation. Creating specific guidelines could face political resistance, especially if revenue shifts between municipalities are possible. It’s unlikely municipalities would accept reduced trade tax revenue despite being unable to tax Amount A profits. Although negative revenue effects could be mitigated with legal regulation and an OECD[110]-expected Amount A tax rate of 26%, political tensions would likely persist. In this context, there are multiple political and administrative reasons to preserve municipalities’ trade tax revenue unaffected by Pillar One. Consequently, it may not be necessary to completely forgo crediting foreign Amount A tax against both pillars of the German income tax system. Instead, trade tax could be included as a lump sum in a non-assessment-based relief procedure.[111] The specific tax rate of individual municipalities would be irrelevant in this scenario. To maintain municipalities’ trade tax revenue and avoid allocation challenges, the relief procedure should be limited to corporation tax. This could be achieved by legally mandating crediting presumed trade tax liability for Amount A to domestic group entities against their corporation tax liability. The corresponding trade tax burden would be determined as a lump sum positive difference between the total income tax burden reported in the Country-by-Country Report (CbCR) of domestic group entities on one hand, and approximately 15.825% of the trade-balance income reported in the CbCR on the other hand, corresponding to an approximate corporation tax and solidarity surcharge burden. The resulting relief entitlement should be offset by corporation tax relief within the centralized relief procedure based on CbCR data.[112] This technique of revenue shifting underlies § 35 of the Income Tax Act (Einkommensteuergesetz – EStG), and concerns raised against it have not gained traction in the context of Amount A taxation. Thus, considering the financial constitutional type and traditional basis for trade tax burden, it is appropriate not to provide relief or revenue reduction regarding foreign Amount A taxes. If international agreements demand equivalent relief, it should be reasonably limited to corporate income tax revenue.[113]

5.

5.1.Due to the high revenue and profit margin thresholds of €20 billion and 10% respectively, only a limited number of corporate groups will be affected by Pillar One.[114] It is estimated that there might be around four corporations with a German top unit and less than 100 corporations worldwide. However, each of these corporations will have numerous subsidiary companies and branches, serving various market states. The group-focused approach requires a central and coordinated administration, as outlined in Chapter 9 (tax certainty – legal certainty) from paragraph 703 and Chapter 10 (implementation and administration) from paragraph 805 onwards, especially paragraph 815 of the Blueprint. According to these guidelines, a coordinating company should be determined for the corporate group, and a leading tax administration (LTA) for the involved tax authorities (Fisci). Tax returns are generally submitted centrally to the LTA for the corporate group (paragraph 716), which is usually responsible at the parent company level (paragraph 717). Another state’s tax authority may assist if needed (paragraph 718f). The corporate group provides a tax return based on standardized principles and a documentation package (paragraph 714).[115] The submission is linked to the Country-by-Country Report, generally due 15 months after the fiscal year’s end (paragraph 724). The return includes a unified determination and allocation declaration, indicating the Amount A-eligible market states with their respective Amount A sums, and the entitlement states (or paying entities) with the Amount A amounts allocated to each market state, along with any applicable taxes levied on them in the market state.[116] The LTA conducts a completeness and consistency review and forwards the declaration data to the other participating tax authorities (paragraph 721, 723f). The corporate group can apply for an early certainty process to obtain legal certainty (paragraph 727ff – early certainty). The LTA can conduct the further examination alone or with a review panel, consisting of officials from three to four market states and two to three production states, in addition to the LTA (paragraph 747). If no agreement is reached, a determination panel will convene, which can decide by a simple majority with the chairman’s casting vote if necessary (paragraph 774). The decisions regarding Amount A should not have any binding effect on the traditional transfer pricing audit by the states (paragraph 788f).[117] The Blueprint also addresses procedures for dispute avoidance and resolution beyond Amount A (paragraph 791ff). According to paragraph 815, the ideal scenario is to have a unified tax payment for the entire group, with details presented in Annex A Part 10 of the Blueprint in the form of a diagram. At this stage, several considerations are suggested. The taxpayer should be the parent company rather than individual paying entities since it is a tax for the entire group. Group companies may still be held liable. Tax assessments should generally be issued to the parent company or coordinating entity, preferably through the LTA.[118] Objections by individual companies should not be allowed, as the group acts as a unit in Amount A taxation. Internal distribution of the tax burden within the group can be managed through intercompany charges. Tax payments to individual tax authorities should also be made through the parent company or coordinating entity (clearing function), resolving the issue of the group not being subject to tax in some market states. The relief mechanism should not apply to individual paying entities but should be settled directly through payments to the parent company or coordinating entity. Alternatively, if relief applies to individual paying entities, the tax exemption or tax credit should be dependent on a tax certificate issued by the parent company or coordinating entity, which should only be issued after the Amount A tax has been paid. Regarding paragraph 774 of the Blueprint, where states are granted a relief obligation by a simple majority of the panel, it is problematic due to the indeterminate allocation criteria of Pillar One. The relinquishing states should have a definitive veto against the panel decision if they are to bear a relief obligation beyond a certain “sacrifice threshold” of tax substrate.[119] To ensure unified and efficient proceedings, the corporate group should not pursue legal remedies in individual participating states, and there should be only one unified taxpayer and potential plaintiff. Legal certainty should be provided based on a comprehensive solution to which the corporate group has agreed, with procedural rights and limitation rules of the states coordinated accordingly. In the German tax administration, a central authority must be highlighted. The administration can logically only be centralized through the Federal Central Tax Office or by a designated federal state. The central authority will act as the LTA in cases where the parent company is tax-resident in Germany, as well as the corresponding national authority in cases with a foreign parent company.[120] To tax Amount A amounts as a market state, a substantive legal basis based on § 49 para. 1 and § 50a of the Income Tax Act (Einkommensteuergesetz – EStG) is required, likely necessitating tax exemption or credit regulations.[121]

6.The considerations presented by the OECD/G20 regarding the Amount A reallocation mechanism under Pillar One of the BEPS 2.0 initiative[122] are highly subjective and complex. Significant uncertainties and potential disputes exist both in determining the relief volumes for market states and in distributing the relief obligations among production states. For the sake of administrability and legal certainty, the determination of relief-obligated states, specifically, should be based solely on a substance-based formula, similar to the rules of the Pillar 2 minimum tax. Furthermore, the relief mechanism should be designed at the state level, not the entity level. Double taxation of excess profits through Amount A and traditional profit allocation rules can be avoided through the Marketing and Distribution Safe Harbour. However, its existing design dates back to 2020 and does not fully consider the conceptual changes that Pillar 1 has undergone since then. The approach should be simplified and expanded to allow each state to tax excess profits as either a production or a market state.[123]

From a financial constitutional perspective, integrating the Amount A tax into the corporate tax presents no significant issues. However, if the revenue is to be included in EU Own Resources, as proposed by the EU Commission, the Amount A tax should be levied as a separate complementary tax with revenue authority solely for the contributing member state. [124]There are no substantial financial constitutional concerns against this approach either. The mechanism to prevent double taxation should be structured as a credit against corporate tax, regardless of this decision. For simplification purposes, it should be processed through a centralized, non-assessment-dependent, and standardized refund procedure. On the other hand, including the Amount A tax and relief obligations in the trade tax (Gewerbesteuer) is to be rejected for tax structural reasons, as it would also raise significant constitutional concerns in some cases. Nevertheless, it might be feasible to include a practical relief mechanism for trade tax within the standardized corporate tax refund procedure.[125]

Currently, discussions are underway with 137 countries concerning both Pillar I and Pillar II, with the common objective of ensuring legal certainty and predictability in tax burdens while avoiding double taxation. All countries within the Inclusive Framework have agreed on both Blueprints, including the USA.[126] Regarding Pillar I, there are numerous initiatives in many countries worldwide. Some countries, including European ones, have already implemented digital taxation. France has reaffirmed its intention to actually levy the French Digital Service Tax, to which the USA has responded with early retaliatory measures in a 1:10 ratio. These points may not be desirable from a business perspective, as they could expose products and services to taxes and tariffs abroad without international coordination. The efforts are focused on avoiding double taxation and dual burdens, recognizing the essential need for coordinated international systems in a globalized world. In connection with the Digital Levy[127] being discussed within the European Union, it is being considered as a separate source of funding for the EU to refinance the European Recovery Program. This program encompasses 750 billion euros, of which 390 billion euros are intended to be repaid through yet-to-be-created own resources.[128] The Council’s resolutions mention several potential sources of own resources, including a financial transaction tax, a plastics levy, emissions-related taxes, and the Digital Levy. However, the financing volume over a period of approximately 30 years from 2028 indicates a significant need for additional funds, putting considerable pressure on establishing new financing sources in a short time. Regarding Pillar II, the GILTI regime introduced by the USA is recognized as equivalent within the framework of Pillar II. For both pillars, the absence of international coordination would result in double and multiple taxation and significantly higher administrative efforts. Companies would then need to comply with various national regulations concerning their cross-border activities and would ultimately face multiple burdens. Finally, a technical question arises concerning geolocation and its allocation in relation to data protection requirements. [129]This allocation could likely only be carried out by the company providing the relevant service. The question rightly asks how this can be captured and assigned.[130] The technical details regarding Geolocation are still being worked out. The idea is that the data will not be managed by the companies themselves but through a system-based examination. Data privacy will be taken into account, and the recording of IP addresses and Geolocation will be enabled to some extent. The data will be stored in a system, but access to individual IP addresses by tax authorities to identify individuals will be avoided.[131] Regarding the impact on the company, considerations have already been made, and comments can be submitted as part of the association’s activities until mid-December. In an ideal world with dispute resolution measures, there would be a redistribution from one country to other countries.[132] The current taxation already considers the realities of Pillar II, and for Pillar I, it is assumed that countries with subsidiary companies should be excluded from Amount A, as the current system and allocation through transfer pricing are sufficient. Regarding the idea of a “World Tax Court” based on IFRS, the question arises as to who decides on interpretation issues. Whether this will lead to an application of IFRS similar to the BFH jurisdiction or foreign courts is still uncertain. Concerning the feasibility of Pillar I and II and the avoidance of double taxation, there are still challenges. The complex task concerns not only substantive law but also practical aspects, starting with data collection and administrative coordination. Judicial reviewability and the willingness of the affected countries, as well as the constitutional boundaries of competence transfer, are other aspects. The representatives involved are asked to contribute their views on feasibility.[133]

The abolition of the trade tax should seriously be considered, to be honest, as we discuss harmonizing taxation bases. The trade tax could be integrated into the corporate tax and then redistributed to the regions through a redistribution process.[134] This topic has been extensively debated, and for reasons of simplification and harmonization within the EU, the trade tax is considered outdated and no longer relevant. The issue of Economic Impact Assessment is highly significant for all countries, as they anticipate increased revenue from both Pillar I and Pillar II. The debate on digital taxation is intense in neighboring countries like Austria, Switzerland, Eastern Europe, and the United Kingdom. Additionally, the participating states also expect increased revenue through Pillar I, especially when they are required to abolish their existing digital taxes and compensate for the loss of revenue. The basis for discussion within the Inclusive Framework assumes that with the implementation of Pillar I, national measures for digital taxation will be scaled back.

Regarding Pillar I, the focus should not only be on avoiding double taxation and dispute resolution mechanisms but also on a crucial aspect preceding the dispute resolution process. This aspect pertains to building trust among the affected member states in the accuracy of the determined Amount A. After all, the calculation of profits is entirely based outside the jurisdiction of the tax-entitled state. Possible connecting factors could involve private customers and users or, in the case of ADS and digital advertising, consumers who are exposed to online advertising. It is essential for all parties to have confidence in the underlying facts, both those who benefit from the regulations and those who do not participate. Once clarity is achieved regarding the mechanism, procedures can be developed to effectively avoid double taxation. Whether the current dispute resolution procedures are sufficient or whether alternative approaches are needed remains uncertain. It is suspected that an increased focus should be placed on new forms of early dispute avoidance.[135] The presentation and the examples provided convey a diffuse image of the connecting factors for taxation, particularly concerning Pillar I. An example is the case of the virtual safari, where it is challenging to identify a tangible connecting point for taxation. In light of a recently expressed insight regarding the tax connection to a domestic registration, the question arises of how this diffuse situation can be reconciled with the belief that such connecting factors are not substantial enough and do not provide appropriate solutions.[136]

Connecting factors should not be diffuse, but sufficiently concrete. In cases of registered rights, the situation concerns instances where there are no further connecting factors within the country apart from registration, no payments are made, and possibly no exploitation takes place within the country. In these cases, the contracting parties are located outside of Germany, making payments due to an intangible asset registered in a German registry.[137] A possible solution would be to examine whether payments are made concerning the protection afforded by the registration in Germany. Nonetheless, verification problems and possible implementation deficits must be considered.[138]

The international community has reached a consensus on the two-pillar model for the reallocation of taxation rights and global minimum taxation.[139] The implementation of this model is planned to take place worldwide in 2024, following an agreed detailed implementation roadmap.[140] To implement Pillar 1, which grants taxing rights to market states (Amount A), the OECD is working on a multilateral agreement (referred to as “Multilateral Instrument 2.0”), which the states are expected to sign in 2022. This agreement will also include provisions to terminate existing digital taxes and other unilateral arrangements. The OECD estimates that with Pillar 1, taxing rights for corporate profits exceeding USD 100 billion annually will be transferred to market states. A concept for Amount B is scheduled to be finalized by the end of 2022.[141] Regarding Pillar 2, the OECD plans to develop model rules in 2022 that can be incorporated into national laws. The global minimum tax is projected by the OECD to generate over USD 150 billion in additional tax revenue worldwide each year.[142] To implement the two-pillar model within the European Union, the European Commission has announced directive proposals for early 2022. The aim is to ensure effective and uniform implementation within the EU.[143]

The aim of this scientific work is to quantify the impact of an international reallocation of taxation rights in favor of market states, based on the OECD’s Unified Approach (Pillar 1)[144], on Germany’s domestic corporate income tax revenue.[145] The analysis reveals that Germany, acting as both a home country and a market state for many multinational companies, would experience both fiscal gains and losses if taxation rights were shifted to market states. In a hypothetical scenario where the right to tax the entire profits of multinational companies above a revenue threshold of 750 million euros per year is transferred to market countries, Germany would face fiscal losses. From 2010 to 2016, corporate income tax revenue in Germany would have been on average 3 billion euros lower, representing about eleven percent of the tax payments made by companies affected by the proposed reform. The manufacturing sector, scientific and technical services, and financial services would be responsible for the losses, while the trade sector would show fiscal gains. These findings highlight that Germany maintains a significant trade surplus, driven by the manufacturing sector and various service sectors. The hypothetical losses would be less pronounced as many German companies fall below the revenue threshold of 750 million euros per year and would not be affected by the reallocation of taxation rights. The current draft of the OECD’s Unified Approach does not involve transferring the right to tax the entire profits to market states.[146] Instead, it focuses on allocating a share of the so-called residual profits – profits exceeding a certain profitability threshold – to market countries. The study’s calculations consider a baseline scenario where 10% of the residual profits are allocated to market states for taxation. Through a reform limited to a share of the residual profits, the fiscal effects differ and are smaller.[147] From 2010 to 2016, such a reform would have generated additional corporate income tax revenue of about 100 million euros per year for Germany, assuming that the share of amount A attributed to Germany is also subject to trade tax and that the double taxation relief is distributed proportionally based on the allocation of residual profits to corporate entities and their respective countries. Germany is among the beneficiaries of the reform due to the higher profitability of German companies abroad compared to domestic operations.

Limiting the transfer of taxation rights to a share of the residual profits impacts various sectors of the economy. In the manufacturing sector, it leads to an increase in the tax base due to lower domestic revenue profitability compared to foreign companies in this sector. As the actual implementation ofthe new international taxation rules is expected in the coming years, the analysis includes a forecast of the effects for the period from 2020 to 2025. During this time, Germany would gain an average of 600 million euros per year in additional revenue.[148] It is essential to consider that these results are based on the data and assumptions used. Restrictions on the application of the new rules to specific economic sectors could alter the results, as the calculations demonstrate. There is also a discussion regarding granting companies or individual countries the right to choose whether they want to be subject to the new taxation rules or continue under the existing system. It is expected that companies currently reporting high profits in low-tax countries and low profits in market states would make use of this option, potentially compromising the primary goal of the proposed reform.[149]

The analysis does not take into account the administrative costs that would arise for financial authorities with the introduction of the new taxation rights. It would be prudent to minimize administrative burden by implementing a “One-Stop-Shop” principle. In such a system, each company would disclose relevant information for calculating and distributing amount A only to a state participating in the Inclusive Framework, usually the company’s home country.[150] This state would then determine the amount of taxes to be paid, collect them, and distribute them to market states, preventing multiple inspections by financial authorities of multiple countries.[151] However, this regulation also carries potential conflicts, as the determination of taxes to be paid would be made by the financial authorities of the company’s home country, and the acceptance of the system depends on the capabilities of all participating states.[152]

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[1] See G. Corasaniti, L´imposta sui servizi digitali: una vera rivoluzione, oppure il messaggio in una bottiglia gettata in mare per i posteri? n, Dir. e Prat. Trib., 2022, 1, 1ff; G. Fransoni, Note sul presupposto dell´imposta sui servizi digitali, in, Rass. Tributaria, 2021, 1, 13; M. Pierro, G. Ziccardi, M. Fasola, Fisco digitale. Cripto-attività, protezione dei dati, controlli algoritmici, 2023.

[2] Cfr. G. Corasaniti, L´imposta sui servizi digitali: una vera rivoluzione, oppure il messaggio in una bottiglia gettata in mare per i posteri? n, Dir. e Prat. Trib., 2022, 1, 1ff; G. Fransoni, Note sul presupposto dell´imposta sui servizi digitali, in, Rass. Tributaria, 2021, 1, 13; M. Pierro, G. Ziccardi, M. Fasola, Fisco digitale. Cripto-attività, protezione dei dati, controlli algoritmici, 2023;  the outcome statement is available here: https://www.oecd.org/tax/beps/outcome-statement-on-the-two-pillar-solution-toaddress-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-july-2023.pdf; Q. Parrinello, M. Barake, E. Pouhaër, The Long Road to Pillar One Implementation: Impact of Global Minimum Thresholds for Key Countries on the Effective Implementation of the Reform, 2023; See Digital Service Taxes by Balladares, Barake, Baselgia, and Borders (2023): https://www.taxobservatory.eu/publication/digital-service-taxes/.

[3] G. Corasaniti, L´imposta sui servizi digitali: una vera rivoluzione, oppure il messaggio in una bottiglia gettata in mare per i posteri? n, Dir. e Prat. Trib., 2022, 1, 1ff; G. Fransoni, Note sul presupposto dell´imposta sui servizi digitali, in, Rass. Tributaria, 2021, 1, 13; M. Pierro, G. Ziccardi, M. Fasola, Fisco digitale. Cripto-attività, protezione dei dati, controlli algoritmici, 2023.

[4] See G. Corasaniti, L´imposta sui servizi digitali: una vera rivoluzione, oppure il messaggio in una bottiglia gettata in mare per i posteri? n, Dir. e Prat. Trib., 2022, 1, 1ff.; G. Fransoni, Note sul presupposto dell´imposta sui servizi digitali, in, Rass. Tributaria, 2021, 1, 13; M. Pierro, G. Ziccardi, M. Fasola, Fisco digitale. Cripto-attività, protezione dei dati, controlli algoritmici, 2023;  Digital Service Taxes by Balladares, Barake, Baselgia, and Borders (2023): https://www.taxobservatory.eu/publication/digital-service-taxes/.

[5] E. Della Valle, La web tax italiana e la proposta di Direttiva sull’Imposta sui servizi digitali: morte di un nascituro appena concepito?, in Fisco, 2018, 1510.V. Uckmar, Introduzione, in AA.VV., Corso di diritto tributario internazionale, V. Uckmar (coordinato da), Padova, Cedam ed., 2002, 1 ss.; V. Uckmar – G. Corasaniti – P. de’ Capitani di Vimercate – C. Corrado Oliva, Manuale di diritto tributario internazionale, Milano, Cedam ed., 2012, XXVI ss.; R. Cordeiro Guerra, Diritto tributario internazionale. Istituzioni, Milano, Cedam ed., 2016; P. Pistone, Diritto tributario internazionale, Torino, Giappichelli ed., 2017; G. Corasaniti, Concorrenza fiscale aggressiva e aiuti di Stato: brevi considerazioni in merito al “Caso Apple”, in Atti del Convegno tenuto a Roma presso la Sapienza Università di Roma il 19 febbraio 2017, P. Boria (a cura di), Milano, Cedam ed., 2018, 86; The outcome statement is available here: https://www.oecd.org/tax/beps/outcome-statement-on-the-two-pillar-solution-toaddress-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-july-2023.pdf; Q. Parrinello, M. Barake, E. Pouhaër, The Long Road to Pillar One Implementation: Impact of Global Minimum Thresholds for Key Countries on the Effective Implementation of the Reform, 2023.

[6] With regard of the digital economy aspects cfr.  G. Corasaniti, L´imposta sui servizi digitali: una vera rivoluzione, oppure il messaggio in una bottiglia gettata in mare per i posteri? n, Dir. e Prat. Trib., 2022, 1, 1ff; G. Fransoni, Note sul presupposto dell´imposta sui servizi digitali, in, Rass. Tributaria, 2021, 1, 13; M. Pierro, G. Ziccardi, M. Fasola, Fisco digitale. Cripto-attività, protezione dei dati, controlli algoritmici, 2023.

[7] V. Uckmar, Introduzione, in AA.VV., Corso di diritto tributario internazionale, V. Uckmar (coordinato da), Padova, Cedam ed., 2002, 1 ss.; V. Uckmar – G. Corasaniti – P. de’ Capitani di Vimercate – C. Corrado Oliva, Manuale di diritto tributario internazionale, Milano, Cedam ed., 2012, XXVI ss.; R. Cordeiro Guerra, Diritto tributario internazionale. Istituzioni, Milano, Cedam ed., 2016; P. Pistone, Diritto tributario internazionale, Torino, Giappichelli ed., 2017; G. Corasaniti, Concorrenza fiscale aggressiva e aiuti di Stato: brevi considerazioni in merito al “Caso Apple”, in Atti del Convegno tenuto a Roma presso la Sapienza Università di Roma il 19 febbraio 2017, P. Boria (a cura di), Milano, Cedam ed., 2018, 86.

[8] BMF, Einigung auf globale Mindeststeuer für Unternehmen, 2021, p. 10 ff.

[9] Kulemann / Mandler, IFO-Schnelldienst 4/2021 Seite 41 ff. kritisieren die Ausgangsfassung der IFO-Studie vom Juni 2020 in methodischer Hinsicht und raten Deutschland, „im weiteren Prozess allergrößte Vorsicht walten zu lassen“

(Seite 50).

[10] Fuest u.a.,„Nationale Steueraufkommenswirkungen einer Neuverteilung von Besteuerungsrechten imRahmen der grenzüberschreitenden Gewinnabgrenzung – Ergänzende Berechnungen“ (StandMai 2021).

[11] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff; Wünnemann (BDI), FR 2021, 26(27), sowie Dehne, DB-Interview (Heft 49/21).

[12] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff.

[13] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff; Wünnemann (BDI), FR 2021, 26(27), sowie Dehne, DB-Interview (Heft 49/21).

[14] Petkowa / Greil, IStR 2021, 685. Zu dem vorangegangenen Diskussionsstand s. Cloer/Postler ,FR 2020, 486.

[15] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff; Wünnemann (BDI), FR 2021, 26(27), sowie Dehne, DB-Interview (Heft 49/21).

[16] The literature is unanimously very skeptical, see Schreiber / Spengel, DB 2021, 2512; Petkova /Greil, IStR 2021, 685 (687 f.); Pinkernell / Ditz, ISR 2021, 449 (450 f.).

[17] Ebenso Bräutigam / Kellermann / Spengel, IStR 2020, 281 (286). Zu den Unterschieden von Cb-CR und CCTB s. Spengel / Stutzenberger, IStR 2018, 37 und jüngst Meyering / Müller-Thomczik/ Luber, FR 2021, 1167.

[18] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff; Wünnemann (BDI), FR 2021, 26(27), sowie Dehne, DB-Interview (Heft 49/21).

[19] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 4 ff; Wünnemann (BDI), FR 2021, 26(27), sowie Dehne, DB-Interview (Heft 49/21).

[20] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 1ff.

[21] A. URICCHIO, W. SPINAPOLICE, La corsa ad ostacoli della web taxation, “Rassegna Tributaria” 3/2018, p. 451 ss; Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II, p. 1; Statement on a Two-Pillar Solution to Address the Tax Challenges Arising From the Digitalisation of the Economy – 1 July 2021, abrufbar unter: https://www.oecd.org/tax/beps/statementon- a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy- july-2021.pdf , S. 2.

[22] Vgl. § 1 KStG sowie § 2 KStG i.V.m. § 49 Abs. 1 EStG.

[23] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1 ff; Cfr. A. Uricchio, La fiscalità dell’intelligenza artificiale tra nuovi tributi e ulteriori incentivi, [in:] U. Ruffolo (ed.), Intelligenza artificiale. Il diritto, i diritti, l’etica, Milano 2020, p. 490 ss; F. L. Giambrone, The taxation implications of the mobility guarantee of the Agreement on the Free Movement of persons between Switzerland and the EU in the experience of the German taxation system, in amministrativamente, 2023, p. 1- 64 .

[24] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1 ff; F. L. Giambrone, Significance and extent of tax avoidance models as distinct from tax evasion from a German taxation perspective. Examples of combating tax evasion and money laundering in the UK. Possible future European taxation perspectives, pp. 45-95, p. 50; Cfr. A. Uricchio, W. Spinapolice, La corsa ad ostacoli della web taxation, op. cit., p. 457 ss.; C. Sciancalepore, Web tax e risorse proprie europee. Un connubio perfetto?, “Rivista di Diritto Tributario – Supplemento online” 11 ottobre 2019, p. 2.

[25] A. F. URICCHIO – P. MANNO , Le emergenze ambientali tra crisi geopolitica e questione ambientale, Rubbettino, 2023.

[26] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1 ff; F. L. Giambrone, Tax Treatment of professional football players remuneration in Germany and Italy. A comparative and EU analysis of a sector with tax gaps from a fiscal and administrave angle, 2022.

[27] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1- 6, 2 ff; F. L. Giambrone, Significance and extent of tax avoidance models as distinct from tax evasion from a German taxation perspective. Examples of combating tax evasion and money laundering in the UK. Possible future European taxation perspectives, pp. 45-95.

[28] A. F. URICCHIO, Sostenibilità e politiche fiscali incentivanti, in Caterino D. e Ingravallo (a cura di), L’impresa sostenibile alla prova del dialogo dei saperi, Dialogi Europaei, 2020, A. F.  URICCHIO, Le bonifiche sostenibili nella nuova Carta di principi presentata dal Ministro dell’ambiente, in AmbienteDiritto, n. 3/2020.

[29] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1 ff; F. L. Giambrone, The taxation implications of the mobility guarantee of the Agreement on the Free Movement of persons between Switzerland and the EU in the experience of the German taxation system, in amministrativamente, p. 1- 64 .

[30] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 1 ff.

[31] A. Schnittinger, O. Fehrenbacher, Kommentar Körperststeuer KStG, 2018, p. 6 ff.

[32] A. F. URICCHIO, A. PIERONI, Ecobilancio dello stato, informazioni ambientali e politiche fiscali per la sostenibilità, in Uricchio A., Selicato G. (a cura di), “Circular Economy and Enviromental Taxation”. Atti della Summer School Bari, 9-15 Settembre 2019, Cacucci Editore, 2021; Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p.5 ff.

[33]A.F. URICCHIO, F. GALLO, A. CUVA, C. BUCCICO, S. DONATELLI, Le novità introdotte con legge 130/2022 di riforma del processo tributario. Prime riflessioni, Cacucci, 2023; Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; P.de Gioia Carabellese, La BRRD (o direttiva bail-in), “atto secondo”, 2020, p. 89-112.

[34] S. BVerfG v. 1.4.1971 – 1 BvL 22/67, BVerfGE 31, 8 (19); BVerfG v. 13.4.2017 – 2 BvL 6/13, BVerfGE 145, 171, Rz. 65, 67, 68 und 114; Cfr. P. de Gioia Carabellese, Legal Research Method, Chair of Law, Academic Year 2017/2018, University of Huddersfield, Law School; E. Finch, S. Fafinski, Legal Skills, Oxford, 2018, VII ed.

[35] S. BVerfG v. 13.4.2017 – 2 BvL 6/13, BVerfGE 145, 171, Rz. 116; s. auch BVerfG, a.a.O.,Rz. 117.

[36] Vgl. Seiler in Dürig/Herzog/Scholz, GG, Art. 106 (Stand 95. EL Juli 2021), Rz. 140; Kube in Epping/ Hillgruber, BeckOK/GG, Art. 106 (Stand 49. EL 15.11.2021), Rz. 18.

[37] EU KOMMISSION, RICHTLINIE DES RATES zum gemeinsamen System einer Digitalsteuer auf Erträge aus der Erbringung bestimmter digitaler Dienstleistungen, 2018; cfr. P. de Gioia Carabellese, Bridge bank (e bail-in) in un recente decisum della Suprema Corte britannica: dal bonus argentarius al coactus argentarius, in Banca impresa società, 2019, p. 377 ss; P. de Gioia Carabellese, Ricapitalizzazione bancaria interna: etiologia, epistemologia, fenome- nologia, fisiologia, patologia,

[38] F. L. Giambrone, Finanzföderalismus als Herausforderung des Europarechts, 2020.

[39] Henneke, Öffentliches Finanzwesen, 2. Aufl. 2000, Rn. 687.

[40] Henneke, Öffentliches Finanzwesen, 2. Aufl. 2000, Rn. 687; so ist denn auch Ziel des Finanzausgleichs„Bund und Ländern die Erfüllung ihrer verfassungsrechtlichen Aufgaben […] zu ermöglichen“, BVerfGE 116, 327 (378) – Berliner Haushalt.

[41] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff.

[42] A. F. Uricchio, L’evoluzione delle norme del diritto tributario internazionale: verso un diritto tributario «globale»?, in, Rivista di diritto tributario internazionale, 2020, p. 39 ff.

[43]A. F. URICCHIO, P. MANNO (2023), Le emergenze ambientali tra crisi geopolitica e questione ambientale, Rubbettino, 2023.

[44] For a further understanding regarding BEPS and the Italian system cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff., in, W. Kraft – Andreas Striegel, WCLF Tax und IP gesprächsband 2017. Immaterielle Werte als zentrale Komponente internationaler Steuerstrategien, 2019; cfr. P. de Gioia Carabellese, Non-executive Directors and Auditors in the Context of the UK Corporate Governance, in European Business Law Review, 2011, p. 759 ss.

[45] For a further understanding regarding BEPS and the Italian system cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff.

[46] Cfr. Oecd/G20 Base Erosion and Profit Shifting Project, Programme of Work to Devolop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy, cit., p. 23 ss. In argomento, cfr. T. Ro-sembuj, Digital taxation: pillar one and two, cit., p. 85 ss.; cfr. URICCHIO A., PERAGINE V., AULENTA M. (2018). Introduzione allo studio della scienza delle finanze, del diritto finanziario e della contabilità pubblica, in URICCHIO A., PERAGINE V., AULENTA M, Manuale di Scienza delle Finanze, Diritto finanziario e contabilità pubblica, Nel Diritto Editore, Roma; Gravelle, 2013; cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff., in, W. Kraft – Andreas Striegel, WCLF Tax und IP gesprächsband 2017. Immaterielle Werte als zentrale Komponente internationaler Steuerstrategien, 2019.

[47] A. F. Uricchio, L’evoluzione delle norme del diritto tributario internazionale: verso un diritto tributario «globale»?, in, Rivista di diritto tributario internazionale, 2020, p. 45 ff.

[48] A. F. Uricchio, Relazione introduttiva tenuta alla summer school Uniba, in, Green Deal e prospettive di riforma

della tassazione ambientale Atti della II Summer School in Circular Economy and Environmental Taxation Bari 17-24 settembre 2021, p. 7 ff, according to whom,   in the context of the new local taxation, particular relevance is given to the enhancement of circular taxation principles, both for tax purposes and for facilitation. The awareness of the close connection between human activities, economic activities, CO2 emissions, and the planet’s rising temperatures directs actions and tax-related tools, even for municipalities and provinces, called upon to complete the so-called ecological transition, seen as an absolute priority among the challenges of the future once the current pandemic emergency is overcome (see the “National Recovery and Resilience Plan,” also known as Next Generation Italy, designed to implement the European Council document on July 21, 2020, Next Generation EU (NGEU), which considers the ecological transition as “the foundation of the new model of development on a global scale”). To initiate this transition, it is necessary to intervene on both the demand and supply sides, improving the energy efficiency of production chains, civilian settlements, and public buildings, as well as the air quality in urban centers and internal and marine waters. This involves incentivizing the effective management of green areas, parks, and urban gardens through substantial interventions in urban and peri-urban territories; Im Überblick Meyer, EuZW 2021, 16.

[49] S. Vorschlag für einen Beschluss des Rates zur Änderung des Beschlusses (EU, Euratom) 2020/2053 über das Eigenmittelsystem der Europäischen Union, v. 22.12.2021, COM(2021) 570 final.

[50] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff., in, W. Kraft – Andreas Striegel, WCLF Tax und IP gesprächsband 2017. Immaterielle Werte als zentrale Komponente internationaler Steuerstrategien, 2019.

[51] Siehe dazu und zum Folgenden den Vorschlag der Kommission für einen neuen Art. 2 Abs. 1 Buchst. g, Vorschlag für einen Beschluss des Rates zur Änderung des Beschlusses (EU, Euratom) 2020/2053 über das Eigenmittelsystem der Europäischen Union, v. 22.12.2021,COM(2021) 570 final.

[52] For an overview regarding the Italian aspects cfr. M. GREGGI, The Regulation of the Italian Tax Office on the Correlative Adjustments Procedure, in, ITAX papers, 8(3) 1ff.

[53] Compare Papier in Ismer/Reimer/Rust/Waldhoff, Territorialität und Personalität, Festschrift Lehner, 2019, page 511 (512): “The federal legislature is prohibited from levying a special tax on income based on its general tax legislation competence under Article 105 (2) GG, which does not fall under income tax as defined in Article 106 (3) sentence 1 GG, nor can be justified as a ‘supplementary levy to income tax and corporate income tax’ as defined in Article 106 (1) No. 6 GG.”; cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff., in, W. Kraft – Andreas Striegel, WCLF Tax und IP gesprächsband 2017. Immaterielle Werte als zentrale Komponente internationaler Steuerstrategien, 2019.

[54] However, this would also eliminate the tax base for the solidarity surcharge. However, since the solidarity surcharge is also considered a supplementary tax under Article 106 (1) No. 6 and is entirely allocated to the federal government, the states would not lose any tax revenues as a result. Nevertheless, from the perspective of tax fairness, it might be advisable to consider this fact by adjusting the amount of any potential Amount A supplementary levy. The Amount A tax would then, for example, be levied at a rate of 15.825% instead of 15% with the unchanged corporate income tax rate of 15.825%.

[55] For an overview regarding tax incentices in Europe an d Italy cfr M. GREGGI, The Italian Tax Incentives to Undertakings and the European Constraints,p. 187, in, M. Abdellatif- B. Tran- Nam- Marina Ranga- s. Hodzic, Government incentives for innovation and Entrenepeurship. An international Experience, 22.

[56] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; cfr. M. GREGGI, Transfer Pricing and Tax Law – BEPS Actions 8, 9, 10 and the Italian System: an Assessment, p.208 ff., in, W. Kraft – Andreas Striegel, WCLF Tax und IP gesprächsband 2017. Immaterielle Werte als zentrale Komponente internationaler Steuerstrategien, 2019.

[57] A. F. URICCHIO, N. TREGLIA  (a cura di), Il processo tributario alla luce della Riforma di cui alla legge 130/2022, Edizioni Duepuntozero, 2023.

[58] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 7ff.

[59] Gesetz zur Änderung und Ergänzung der Finanzverfassung (Finanzverfassungsgesetz) v. 23.12.1955, BGBl. I 1955, S. 817 (817).

[60] BT-Drucks. II/480, p. 72, see also Schemmel, Unconstitutional Solidarity Surcharge, 2008, p. 9, as well as Birk, FR 2010, 999 (1003), on historical precursors of supplementary levies in the German Empire, which were levied for a limited time to address deficits in the legal budget.

[61] BT-Drucks. II/480, 72. S. auch Schemmel, Verfassungswidriger Solidaritätszuschlag, 2008, S. 9, sowie Birk, FR 2010, 999 (1003), zu historischen Vorläufern der Ergänzungsabgabe im Deutschen Reich, die zwecks Rückführung von Defiziten im Rechtshaushalt jeweils befristet erhoben wurden.

[62] S. BVerfG v. 9.2.1972 – 1 BvL 16/69, BVerfGE 32, 333, Rz. 23; s. auch BVerfG (K) v. 8.9.2010 – 2 BvL 3/10, FR 2010, 999 m. Anm. Birk, Rz. 14 ff. Insoweit zustimmend bspw. Korioth, Der Finanzausgleich zwischen Bund und Ländern, 1997, S. 352.

[63] S. Papier in Ismer/Reimer/Rust/Waldhoff, Territorialität und Personalität, FS Lehner, 2019, S. 511 (512); Birk, FR 2010, 999 (1003); Schön, StuW 2013, 289 (295); Wernsmann, ZG 2020, 181 (185); Woitok, StuW 2021, 17 (23); Kube, StuW 2022, 3; tendenziell auch Seiler in Dürig/ Herzog/Scholz, GG, Art. 106 (Stand 95. EL Juli 2021), Rz. 117; Heintzen in v. Münch/Kunig, GG, 7. Aufl. 2021, Art. 106, Rz. 21; grds. ebenso Hidien in Kahl/Waldhoff/Walter, Bonner Kommentar zum Grundgesetz, Art. 106 (Stand 103. EL Dezember 2002), Rz. 1431, der daran aber keine hohen Begründungsanforderungen stellen will. A.A. Tappe, StuW 2022, 6 (7). Der BFH wiederum hat sich zumindest für das Erfordernis eines fiskalischen Mehrbedarfs gerade nur des Bundes ausgesprochen, s. BFH v. 21.7.2011 – II R 52/10, BStBl. II 2012, 43, Rz. 17 und 25 =FR 2011, 896 m. Anm. Kanzler.

[64] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff.

[65] S. Mitteilung der Kommission v. 27.5.2020, COM(2020) 456 final, S. 4.

[66] A. F. URICCHIO, F. L. GIAMBRONE, Schlussfolgerungen, in Uricchio A., Giambrone F., Entwicklungen im italienischen Steuerrecht als Herausforderung des neuen europäischen Entwicklungsprozesses, Cacucci editore, 2020; Once the loans taken for financing the EU recovery instrument are repaid (according to current planning, no later than 2058), if the Amount A tax revenue is no longer claimed as own resources by the EU, the supplementary levy must be abolished, and the Amount A tax should be fully integrated into the corporate income tax.

[67] BVerfG v. 9.2.1972 – 1 BvL 16/69, BVerfGE 32, 333, Rz. 19. Vgl. auch schon BT-Drucks. II/484,4.

[68] Dieser Gesichtspunkt ergibt sich auch aus den Überlegungen zum Finanzverfassungsgesetz 1955, vgl. BT-Drucks. II/480, 229.

[69] S. BFH v. 21.7.2011 – II R 52/10, BStBl. II 2012, 43 = FR 2011, 896 m. Anm. Kanzler, Rz. 16; Heintzen in v. Münch/Kunig, GG, 7. Aufl. 2021, Art. 106, Rz. 21.

[70] A. F. URICCHIO, F. L. GIAMBRONE, Entwicklungen im italienischen Steuerrecht als Herausforderung des neuen europäischen Entwicklungsprozesses, Cacucci editore, 2020.

[71] See the calculations in Fuest et al., “National Tax Revenue Effects of a Redistribution of Taxing Rights within the Framework of Cross-Border Profit Allocation – Supplementary Calculations” (as of May 2021), page 11, Scenario “US 3,” second column; in conjunction with the corresponding original study by Fuest et al., 2020, page 25, in conjunction with OECD, Statement (Fn. 1).

[72] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff.

[73] Vgl. BFH v. 21.7.2011 – II R 52/10, BStBl. II 2012, 43 = FR 2011, 896 m. Anm. Kanzler, Rz. 15. Tendenziell niederschwelliger Kube, StuW 2022, 3 (Fußnote 7): „[…] bei zweistelligen Raten wird eine Aushöhlung in Betracht kommen“.

[74] S. BVerfG v. 9.2.1972 – 1 BvL 16/69, BVerfGE 32, 333, Rz. 23.

[75] S. BVerfG v. 9.2.1972 – 1 BvL 16/69, BVerfGE 32, 333, Rz. 21.

[76] S. Hidien in Kahl/Waldhoff/Walter, Bonner Kommentar zum Grundgesetz, Art. 106 (Stand 103. EL Dezember 2002), Rz. 1433; Frank, Verfassungsmäßigkeit und Zukunft des Solidaritätszuschlags, 2019, S. 35 ff.

[77] S. die Verordnung des Reichspräsidenten zur Sicherung von Wirtschaft und Finanzen v. 1.12.1930, RGBl. I 1930, 517 (528); A.F.URICCHIO – F.L.GIAMBRONE, European Finance at the emergency test 2020.

[78] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; M. GREGGI, The Regulation of the Italian Tax Office on the Correlative Adjustments Procedure, in, ITAX papers, 8(3) 1-5; F. L. GIAMBRONE,  Protection in Germany of the fundamental rights of the European Union (GrCH). Case note of the BVerfG (German Federal Constitutional Court) of 06.11.2019 – 1 BvR 16/13 concerning the interpretation of the fundamental rights within the Basic law with regard to non- fully harmonized EU law, in, Journal of Modern science, 2/2021 vol. 47, 1, p. 523 ff; A. F. URICCHIO, F. L. GIAMBRONE, Entwicklungen im italienischen Steuerrecht als Herausforderung des neuen europäischen Entwicklungsprozesses, Cacucci editore, 2020.

[79] A. F. URICCHIO, F. L. GIAMBRONE, European Finance at the Emergency test, Cacucci editore, 2020.

[80] C. A. Giusti- F. L. Giambrone, Towards an European harmonized environmental taxation policy. Comparative aspects of fiscal federalism and taxation aspects with regard to Germany, in Comparazione e diritto civile, 2023, p. 1-53.

[81] A. F. URICCHIO, A. BONOMO, L. TAFARO (2021). Le nuove frontiere dell’eco-diritto, Cacucci Editore, 2021.

[82] C. A. Giusti, F. L. Giambrone, The nomophylactic function of the European Court of Justice in tax matters within the italian and German experience. Possible Dispute Settlement Solutions for the Member States, in, comparative law review 2019.

[83] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; For an overview regarding tax incentices in Europe an d Italy cfr M. GREGGI, The Italian Tax Incentives to Undertakings and the European Constraints,p. 187, in, M. Abdellatif- B. Tran- Nam- Marina Ranga- s. Hodzic, Government incentives for innovation and Entrenepeurship. An international Experience, 22.

[84] Deloitte, Country – by- country Reporting. The Faqs, September 2016.

[85] A.A. Haarmann in Lüdicke/Mellinghoff/Rödder, Nationale und internationale Unternehmensbesteuerung in der Rechtsordnung, FS Gosch, 2016, S. 123 (131); Hey in Tipke/Lang, Steuerrecht, 24. Aufl. 2021, Rz. 12.18.

[86] A. F. URICCHIO, L’Università di Bari e le leggi antiebraiche. Le storie interrotte dei docenti perseguitati: Giorgio Tesoro, in MASTROBERTI F., HOXHA D., Storie interrotte. I docenti dell’Università di Bari e le leggi antiebraiche, Il Mulino, 2021.

[87] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff; P. de Gioia Carabellese, The Bank Insolvency Directive (Directive 2001/24/EC) Halfway Between Scylla (Politics) and Charybdis (Finance): a Comparative and Empirical Analysis, in Law and Economics Yearly Review, 2015, p. 178 ss.

[88] see § 35a GewStG.

[89] see § 2 para. 1 sentence 3 GewStG in conjunction with § 12 AO.

[90] F. L. Giambrone, Transposition of the Judgements of the European Court of Justice in Germany. Case note regarding the abnormal use of checks in the judgement of 5 May 2020 of the German Federal Constitutional Court from a fiscal point of view, in, Rivista di diritto finanziario e scienza delle finanze, 2021.

[91] S. insb. Tipke, StRO II, 2. Aufl. 2003, S. 1141; Sarrazin in Lenski/Steinberg, GewStG, § 1 (Stand 137. EL August 2021), Rz. 14 f. Ambivalent P. Kirchhof in Lüdicke/Mellinghoff/Rödder, Nationale und internationale Unternehmensbesteuerung in der Rechtsordnung, FS Gosch, 2016, S. 193 (195 und 197): Für sich genommen habe das Äquivalenzprinzip keine legitimierende Wirkung mehr, es diene aber noch als „Orientierungshilfe zur Rechtfertigung und zur Weiterentwicklung der Gewerbesteuer“.Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 8ff.

[92] A. F. URICCHIO  (2021). La costruzione della società ecologica: il Green New Deal e la fiscalità circolare, in Rivista di diritto agroalimentare, n. 1/2021.

[93] M. Kloepfer, Finanzverfassungsrecht mit Haushaltsverfassungsrecht, p. 172 ff; BVerfGE 120, 1 (25); BT-Drs. 13/8488, S. 6; 13/8348, S. 15; Henneke, Öffentliches Finanzwesen, 2. Aufl. 2000, Rn. 903; P. de Gioia Carabellese, The Bank Insolvency Directive (Directive 2001/24/EC) Halfway Between Scylla (Politics) and Charybdis (Finance): a Comparative and Empirical Analysis, in Law and Economics Yearly Review, 2015, p. 178 ss.

[94] Henneke, Öffentliches Finanzwesen. Finanzverfassung, 2. Aufl. 2000, Rn. 903; Heintzen, in: v. Münch/Kunig (Hg.), Grundgesetz-Kommentar, 6. Aufl. 2012, Art. 106 Rn. 50, bezeichnet dies als von vornherein theoretisch, da schon der Realsteuerbegriff auf Grund- und Gewerbesteuer „traditionell“ festgelegt gewesen sei; C.A. GIUSTI, F. L. GIAMBRONE, The Biffi Judgement and the Suarez case. Judicial decision of the ECJ and possible reforms of the italian civil code from an european point of view, 2020, in, Annali del CERSIG (Centro di Ricerca sulle Scienze Giuridiche).

[95] URICCHIO A., MANNO P. (2023), Le emergenze ambientali tra crisi geopolitica e questione ambientale, Rubbettino, 2023.

[96] A. F. URICCHIO , Depenalizzazione dei reati formali e il reato di omessa dichiarazione nel sistema penale tributario, in Sicurezza e Giustizia, 1, 2023; Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff.

[97] D. CHECCHI,  T. JAPPELLI , A.F. URICCHIO (2022), Teaching , research and academic careers,  Springer Nature 2022, ISBN 978-3-031-07437-0.

[98] Vgl. Statement on a Two-Pillar Solution to Address the Tax Challenges Arising From the Digitalisation of the Economy – 1 July 2021, abrufbar unter: https://www.oecd.org/tax/beps/statementon- a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy- july-2021.pdf , S. 2.

[99] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff; For a further understand regarding DAC 6 cfr. M. GREGGI, DAC6 and legal osmosis: the multiple interactions of the discipline with pre- existing internal and European regulations and institutions DAC6 e osmosi giuridica: le plurime interazioni della disciplina con preesistenti norme ed istituti dell’ordinamento interno ed europeo, in, RIVISTA DI DIRITTO TRIBUTARIO , Vol. 7, No. 2-bis, pp: 1-16, 2021.

[100] F. L. Giambrone, New fiscal, monetary, financial, banking and capital perspectives of the European Union, Centro interuniversitario popolazione, ambiente e salute, Nr. 39, 2021,Cacucci editore, p. 1- 598.

[101] S. BFH v. 11.3.2015 – I R 10/14, BStBl. II 2015, 1049, Rz. 10 = FR 2015, 719 m. Anm. Klein; Roser in Lüdicke/Mellinghoff/Rödder, Nationale und internationale Unternehmensbesteuerung in der Rechtsordnung, FS Gosch, 2016, S. 351 (352); Drüen in Brandis/Heuermann, EStG/KStG/GewStG, § 2 GewStG (Stand 160. EL Dez. 2021), Rz. 362.

[102] A. F. URICCHIO (2022), La delega fiscale, occasione mancata per disegnare la finanza locale, in Rass. trib., 2022, p. 188 Anno, LXVI, ISSN 1590-949 X.

[103] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9 ff.

[104] A. Schnitger, O. Fehrenbacher, Kommentar Körperschaftsteuer KStG, PWC, 2018, P. 2078 ff; Cfr. A.F. URICCHIO – S. A. PARENTE, Data Driven e Digital Taxation: Prime sperimentazioni e nuovi modelli di prelievo, in, Diritto e pratica tributaria internazionale n. 2/2021.

[105] C.A. GIUSTI, F. L. GIAMBRONE, The Biffi Judgement and the Suarez case. Judicial decision of the ECJ and possible reforms of the italian civil code from an european point of view, 2020, in, Annali del CERSIG (Centro di Ricerca sulle Scienze Giuridiche).

[106] A. Schnitger, O. Fehrenbacher, Kommentar Körperschaftsteuer KStG, PWC, 2018, P. 2078 ff.

[107] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff.

[108] A. F. URICCHIO, G. SELICATO, Green deal e prospettive di riforma della tassazione ambientale. Atti della II summer school in circular economy and environmental taxation, Cacucci, 2022.

[109] (§ 2 para. 6 Trade Tax Act.

[110] OECD, Internationale Staatengemeinschaft erzielt bahnbrechende Steuervereinbarung für das digitale Zeitalter, Pressemitteilung vom 8.10.2021, (Fn. 5).

[111] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 10 ff.

[112] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff.

[113] A. F. URICCHIO (2022). Sulla legittimità costituzionale dell’obbligo di versamento all’erario posto a carico delle BCC che optino per il conferimento del proprio patrimonio netto a una SPA, in Giurisprudenza costituzionale, n. 1/2022.

[114] OECD, Internationale Staatengemeinschaft erzielt bahnbrechende Steuervereinbarung für das digitale Zeitalter, Pressemitteilung vom 8.10.2021, (Fn. 5).

[115] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff.

[116]Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 9ff; Fehling/Koch, IStR 2021, 561, 566 weisen auf die Parallelen zu einer Hinzurechnungsbesteuerung hin. Ebd, zur Bedeutung der „Switch-over Rule“ (SOR), die nicht ausdrücklich in der Vereinbarung erwähnt wird.

[117] OECD/G20 BEPS, Statement on a Two-Pillar Solution (Fn. 6.), Pillar One, S. 1 f.;

[118] A. F. URICCHIO, Profili fiscali dell’impiantistica sportiva, in AA. VV., Argomenti di diritto nazionale e internazionale dello sport e di giustizia sportiva, Edizioni Duepuntozero, 2022; C. A. Giusti- F. L. Giambrone, Towards an European harmonized environmental taxation policy. Comparative aspects of fiscal federalism and taxation aspects with regard to Germany, in comparazione e diritto civile, p. 1-53, Edizioni Scientifiche Italiane, 2023.

[119] Cfr. A. F. URICCHIO- F. L. GIAMBRONE, The EU budget powering the Recovery plan for Europe, in, open review of Management Banking, Finance,  2020.

[120] F. GALLO, A.F. URICCHIO (2022), la tassazione dell’economia digitale,  Cacucci.

[121] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II, p. 16 ff.

[122] Refer to the references in footnotes 11 and 12 of Part 1 of this article, as well as the recently published consultation documents: “Pillar One – Amount A: Draft Model Rules for Domestic Legislation on Scope” from 4 April to 20 April 2022, and “Pillar One – Amount A: Extractives Exclusion” from 14 April to 29 April 2022, which are available online.

[123] A. F. URICCHIO,  The Future of European Environmental Policy in Appreciation of German Federal Constitutional Jurisprudence, in The Italian Law Journal, 8, 2022.

[124] A. F. URICCHIO/ F. L. GIAMBRONE, European finance at the test of the emergency , ISBN:, 9788866119180 Cacucci Verlag, 2020, Series of the Ionian department in “Mediterranean Legal and Economic Systems: societies, environment and cultures”, Universitá Aldo Moro di Bari.

[125] Vgl. J. Englisch – I. van Lishaut, Die Implementierung von Pillar One in das deutsche Steuerrecht, Teil II,2022,  p. 5ff.

[126] B. Kaminsky, Der OECD-Blueprint zur Besteuerung digitaler Geschäftsmodelle (Pillar One), in, L. Hummel, B. Kaminski, Internationale Besteuerung unter Bedingungen der Unsicherheit, 2022, p. 224 ff.

[127] Cfr. A. F. URICCHIO, L´ imposizione della data economy tra proposte di nuove forme di prelievo, wex tax italiana e global minimum tax , p. 69 ff, in, F. GALLO – A. F. URICCHIO, La tassazione dell´ economia digitale tra imposta sui servizi digitali, global minimum tax e nuovi modelli di prelievo, 2023.

[128] A. F. URICCHIO (2022), Verso la regolazione e la tassazione dell’intelligenza artificiale: dal fantadiritto a prospettive di riforma, in Rivista di diritto tributario internazionale, 2, 2022.

[129] For a further understand regarding DAC 6 cfr. M. GREGGI, DAC6 and legal osmosis: the multiple interactions of the discipline with pre- existing internal and European regulations and institutions DAC6 e osmosi giuridica: le plurime interazioni della disciplina con preesistenti norme ed istituti dell’ordinamento interno ed europeo, in, RIVISTA DI DIRITTO TRIBUTARIO , Vol. 7, No. 2-bis, pp: 1-16, 2021.

[130] B. Kaminsky, Der OECD-Blueprint zur Besteuerung digitaler Geschäftsmodelle (Pillar One), in, L. Hummel, B. Kaminski, Internationale Besteuerung unter Bedingungen der Unsicherheit, 2022, p. 224 ff.

[131] A. F. URICCHIO, P. DE GIOIA CARABELLESE (2022), La Council Tax nel Regno Unito come modello per la finanza locale italiana, in Rivista della Corte dei Conti, 6, 2022.

[132] F. L. GIAMBRONE, Future perspectives of European corporate taxation. Towards an harmonized European Corporate taxation within the Member States, in, Rivista di Dottrina fiscale, Anno II – N.1/2023, issn 2974-6280, pp.159-191, p. 32.

[133] B. Kaminsky, Der OECD-Blueprint zur Besteuerung digitaler Geschäftsmodelle (Pillar One), in, L. Hummel, B. Kaminski, Internationale Besteuerung unter Bedingungen der Unsicherheit, 2022, p. 224 ff.

[134] A. F. URICCHIO (2022), Capacità contributiva e “agenda” del terzo millennio: dalla tutela dell’ambiente all’economia circolare, in MASTROIACOVO V., MELIS G. (a cura di), Il diritto costituzionale tributario nella prospettiva del terzo millennio, Giappichelli, 2022

[135] A. F. URICCHIO (2022), Crisi energetica, transizione ecologica e ruolo della fiscalità, in Rass. Trib., 4, 2022.

[136] B. Kaminsky, Der OECD-Blueprint zur Besteuerung digitaler Geschäftsmodelle (Pillar One), in, L. Hummel, B. Kaminski, Internationale Besteuerung unter Bedingungen der Unsicherheit, 2022, p. 233 ff.

[137] A. F. URICCHIO – N. TREGLIA (2022). Emergenza COVID e superbonus 110%, in Gazzetta forense, Speciale Covid 2.

[138] B. Kaminsky, Der OECD-Blueprint zur Besteuerung digitaler Geschäftsmodelle (Pillar One), in, L. Hummel, B. Kaminski, Internationale Besteuerung unter Bedingungen der Unsicherheit, 2022, p. 234 ff.

[139] Wissenschaftliche Dienste des d. Bundestages, Internationale Steuerreform mit globaler Mindeststeuer. Das Zwei-Säulen -Modell der OECD, 2021, p. 10 ff

[140] A. F. URICCHIO (2022), Gianni Garofalo collega e interlocutore, in VOZA R., BARBIERI M. (a cura di), Gianni Garofalo, dieci anni dopo, Cacucci, 2022

[141] Wissenschaftliche Dienste des d. Bundestages, Internationale Steuerreform mit globaler Mindeststeuer. Das Zwei-Säulen -Modell der OECD, 2021, p. 10 ff

[142] OECD/G20 BEPS, Statement on a Two-Pillar Solution (Fn. 6), Annex. Detailed Implementation Plan, S. 7.

[143] Wissenschaftliche Dienste des d. Bundestages, Internationale Steuerreform mit globaler Mindeststeuer. Das Zwei-Säulen -Modell der OECD, 2021, p. 10 ff

[144] A. F. URICCHIO (2022), Verso la riforma della giustizia tributaria: forse è la volta buona, In Unità e Pluralità del sapere giuridico, 2022.

[145] C. Fuest, F. Nuemeier, D. Stöhlker, Nationale Steueraufkommens- wirkungen einer Neuverteilung von Besteuerungsrechten im Rahmen der grenzüberschreitenden Gewinnabgrenzung Studie im Auftrag des Bundesministeriums der Finanzen, 2020,  Ifo Institut, p. 50 ff.

[146] C. Fuest, F. Nuemeier, D. Stöhlker, Nationale Steueraufkommens- wirkungen einer Neuverteilung von Besteuerungsrechten im Rahmen der grenzüberschreitenden Gewinnabgrenzung Studie im Auftrag des Bundesministeriums der Finanzen, 2020,  Ifo Institut, p. 50 ff.

[147] A. F. URICCHIO (2022). Il ruolo di Anvur nella valutazione dei percorsi formativi per gli insegnanti, A. DE VIVO, M. MICHELINI, M. STRIANO (a cura di), Professione insegnante. Quali strategie per la formazione?

[148] A. F. URICCHIO (2022), Capacità contributiva e “agenda” del terzo millennio: dalla tutela dell’ambiente all’economia circolare, in Diritto e processo tributario, 2, 2022.

[149] cfr. M. GREGGI, DAC6 and legal osmosis: the multiple interactions of the discipline with pre- existing internal and European regulations and institutions DAC6 e osmosi giuridica: le plurime interazioni della disciplina con preesistenti norme ed istituti dell’ordinamento interno ed europeo, in, RIVISTA DI DIRITTO TRIBUTARIO , Vol. 7, No. 2-bis, pp: 1-16, 2021

[150] A. F. URICCHIO  (2022). Le prospettive di riforma della fiscalità ambientale in ambito UE nell’ottica della transizione ecologica e della fiscalità circolare, in Rivista di diritto tributario internazionale, 1, 2022.

[151] A. F. URICCHIO, E. JORIO, Regionalismo differenziato: gli adempimenti preparatori delle Regioni, in Astrid online, 5, 2023.

[152] C. Fuest, F. Nuemeier, D. Stöhlker, Nationale Steueraufkommens- wirkungen einer Neuverteilung von Besteuerungsrechten im Rahmen der grenzüberschreitenden Gewinnabgrenzung Studie im Auftrag des Bundesministeriums der Finanzen, 2020,  Ifo Institut, p. 50 ff.

Author

* Adjunct Professor, Universitá degli Studi del Sannio