Why MNEs Should Reassess SPVs in Light of Pillar Two
SummaryMNEs use Special Purpose Vehicles (SPVs) for a variety of reasons, some of which are not tax-related.
However, the nature of the Pillar Two GloBE Rules means that in some cases, SPVs can be extremely inefficient from a tax perspective, particularly if they are located in a low-tax jurisdiction. They could result in excess Pillar Two top-up tax for the group.
In this article, we look at the reasons why this could be the case.
What is the Issue?
Let’s take this scenario:
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Lee is a qualified Chartered Accountant and Chartered Tax Adviser.
A former Senior Tax Analyst at Bloomberg Tax, Lee began his career in
Ernst & Young's Entrepreneurial Services department and has 20 years of international tax planning experience.
Lee's books have been recommended by The Times, The Guardian and The Telegraph.
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