Tax revenue from Pillar One Amount A: country-by-country estimates

Mona Barake () and Elvin Pouhaër ()
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Mona Barake: Paris School of Economics
Elvin Pouhaër: Paris School of Economics

International Tax and Public Finance, 2025, vol. 32, issue 3, No 3, 680-740

Abstract: Abstract This paper presents first-round simulations of the tax revenues arising from the Pillar One Amount A proposal of the G20/OECD inclusive framework on base erosion and profit shifting for 2016–2025. Amount A aims at revising taxing rights on multinational enterprises with at least €20 billion in revenue and profitability above 10%. We consider the latest available Pillar One Amount A rules as detailed in the “Multilateral Convention to Implement Amount A of Pillar One” (OECD 2023b). In a first step, we identify the multinationals that would be “covered” under Pillar One Amount A. Then, by combining micro and macro data sources, we create a database that approximates these Covered Groups’ worldwide distribution of destination-based revenues, profits, employees, and tangible assets. Destination-based revenues serve to reallocate Amount A profits across jurisdictions. Finally, we account for double taxation relief to obtain country-level net revenue estimates from Pillar One Amount A. The aggregate additional tax revenue arising from Pillar One Amount A varies from €5.7 billion in 2020 to €10.9 billion in 2022. We provide country-specific estimate ranges and a comparison to digital taxes. The trade-off between Amount A and digital taxes is unclear and may vary from one country to another. Testing for the implications of various provisions of Amount A rules, we observe that the extent of taxing rights redistribution is seriously affected by the Marketing and Distribution Safe Harbour (MDSH), while the profit reallocated to low and lower-middle-income jurisdictions crucially depends on the tail-end revenues provision.

Keywords: Pillar One Amount A; Two-pillar solution; International taxation (search for similar items in EconPapers)
JEL-codes: F23 F55 H27 H73 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10797-024-09859-4

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