Examining the Intended und Unintended Effects of Global Book Minimum Taxes [project GBMT]

• Applicant: Dr. Max Pflitsch
• Subject Area: Accounting and Finance
• Term: since 2025
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 566259558

This project examines the behavioral effects of global minimum tax reforms—BEPS Pillar II and the U.S. Corporate Alternative Minimum Tax (CAMT)—which base taxation on financial accounting income. While aiming to ensure fairness by imposing a 15% minimum tax rate, these measures introduce significant challenges due to their reliance on financial reporting outcomes. This study focuses on firms' accounting and real economic responses to these tax reforms, exploring how companies adjust earnings to reduce tax burdens or avoid applicability thresholds and how such measures impact financial reporting quality. The analysis proceeds in three work packages. WP1 systematically compares the legislative frameworks of BEPS Pillar II and CAMT, highlighting key differences in scope, thresholds, and tax base calculations across countries. WP2 investigates firms’ accounting responses, such as earnings management to avoid or minimize tax liabilities. This includes examining the effects on financial reporting quality and identifying unintended consequences for stakeholders. WP3 analyzes real economic behaviors, including M&A activities, organizational restructuring, and changes in profit-shifting strategies, emphasizing the welfare implications of delayed transactions or forgone synergies. By combining theoretical insights with empirical analyses, the project provides a comprehensive understanding of the intended and unintended consequences of taxing financial accounting income. The findings will offer valuable guidance for policymakers on balancing revenue generation with the potential trade-offs for financial reporting and economic activity.

• DFG Programme: Research Grants