On October 8, 2021, over 130 countries committed themselves to the most far-reaching changes in the international tax regime since its inception in 1923. Slated to begin on the anniversary year of 2023, this new regime (ITR 2.0) adopts significant changes from the old one (ITR 1.0). Specifically, ITR 2.0 eliminates the physical presence requirement and the arm’s length standard for a significant portion of the profits of large multinationals that have been essential elements of ITR 1.0 since the 1930s, in a way that is more consistent with ITR 1.0’s Benefits Principle (BP). ITR 2.0 also explicitly implements the Single Tax Principle (STP) that has formed part of ITR 1.0 from the beginning but had only been partially implemented. Overall, ITR 2.0 is a victory for the attempts to make multinationals pay their fair share in taxes and to update the ITR for the 21st century.
Law and Economics | Tax Law
Date of this Version
Working Paper Citation
Avi-Yonah, Reuven S., "The New International Tax Regime" (2021). Law & Economics Working Papers. 215.