Vincent Beyer (UN Trade and Development), International Investment Agreements and the Global Minimum Tax: Of Treaty Troubles and Investment Incentives, 27 J. Int'l Econ. L. 241 (2024):

Statutory and effective tax rates have witnessed a marked decline over the past decades, prompting international tax policymakers to grapple with the challenge of tax competition. The latest tool in this struggle is the global minimum tax (GMT). This paper examines the intersection between the GMT and International Investment Agreements (IIAs). It first briefly explains the operation of the GMT and reviews how IIAs address domestic tax measures. It goes on to argue that multinational enterprises (MNEs) affected by the GMT are unlikely to file large numbers of investor-State dispute settlement cases to challenge its implementation. Instead, MNEs will leverage IIAs in seeking to replace corporate income tax incentives captured by the minimum tax with alternative economic benefits. 

Given how income-tax-based investment incentives are administered in practice, many MNEs could plausibly argue that the withdrawal or undermining of these incentives through top-up taxes violates IIA protection standards. The paper concludes by outlining the potential motivations and options for MNEs seeking to replace tax incentives and the implications for the ongoing global effort to address tax challenges. Ultimately, the GMT’s design means that the race to the bottom is likely to shift elsewhere.

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