Document Type


Publication Date


Source Publication

Tax Notes Federal, March 21, 2022, p. 1695


The OECD released pillar 2 model rules last December to provide a template for domestic legislation to implement the agreement reached on October 8, 2021, by almost 140 inclusive framework members on a two-pillar solution to address global ta challenges. The model rules are limited to the income inclusion rule (IIR) and undertaxed payments rule (UTPR) (collectively known as the global anti-base-erosion (GLOBE) regime) in the October agreement. However, and rather surprisingly, the meaning of the letter “P” in the UTPR was effectively changed from payments to profits in the model rules. There was little, if any, public discussion about this variation. The acronym UTPR is not truly defined in the model rules; chapter 10 merely defines it to mean “the rules set out in Article 2.4 to Article 2.6,” and those rules do not refer to payments or profits. The model rules do not even fully spell out UTPR and use the acronym from the very beginning.