International Tax in a Changing Global Landscape: BEPS, Pillar Two and Global Tax Governance

International taxation continues to evolve. Developments such as the International taxation continues to evolve. Developments such as the , Pillar Two, the global minimum tax and ongoing discussions on international tax cooperation at the United Nations are reshaping the environment in which governments, businesses and tax professionals operate.

Understanding these developments, however, also requires returning to some of the foundations of international tax.

What gives a jurisdiction the right to tax? How are taxing rights coordinated when economic activity crosses borders? Why do countries compete through their tax systems? How should different forms of tax planning and avoidance be understood? And how are international tax standards developed?

These were among the questions explored during the Tax Academy of Singapore's International Tax Law and Policy Programme, held from 20 to 22 July 2026 and led by Dr Leopoldo Parada, Reader in Tax Law at King's College London. The final module on global tax governance was co-facilitated by Ms Chua Jia Ying, Senior Research Associate at the Singapore Tax Academy Research Initiative (STARI).

Across six modules, the programme moved from the principles underpinning income taxation to some of the most significant contemporary developments in international tax.

Six ideas for understanding today's international tax landscape

1. International taxation begins with domestic taxing rights

Concepts such as residence and source help determine when and how jurisdictions assert taxing rights over income.

While these concepts originate within domestic tax systems, complexity arises when economic activity crosses borders and more than one jurisdiction has a basis for taxing the same income.

International taxation therefore involves, among other things, understanding how these overlapping taxing claims are coordinated.

2. Tax treaties help coordinate taxing rights between jurisdictions

Tax treaties provide a framework through which jurisdictions coordinate the taxation of cross-border income.

They commonly address questions such as which jurisdiction may tax particular categories of income, whether taxation at source should be limited, and how relief may be provided where double taxation arises.

Looking at tax treaties through the lens of allocating and coordinating taxing rights can help explain why concepts such as residence, source and permanent establishment feature so prominently in international tax law.

3. Tax competition forms part of wider competition between jurisdictions

Countries compete for investment, businesses, talent and economic activity.

Tax policy can form part of that competition, but it is not the only factor. Decisions about where businesses invest or operate may also reflect considerations such as market access, infrastructure, political and economic stability, workforce capabilities and the wider business environment.

International discussions on tax competition have therefore focused not simply on whether competition exists, but also on circumstances in which particular tax practices may be considered harmful.

This distinction is important because not all forms of competition between tax systems are necessarily the same.

4. Precision matters when discussing tax avoidance

Terms such as tax avoidance, tax evasion, tax planning, aggressive tax planning and double non-taxation are frequently encountered in discussions of international taxation.

The programme examined why these concepts should not automatically be treated as interchangeable.

Tax evasion generally involves unlawful conduct. Questions involving tax avoidance can be more complex and may depend on the applicable legal framework, including specific and general anti-avoidance rules.

Similarly, an outcome in which income is not taxed in two jurisdictions does not, by itself, establish that unlawful conduct has occurred.

The broader lesson is that terminology matters. Clear distinctions help ensure that discussions about tax policy and anti-avoidance measures are directed at the particular issues they are intended to address.

5. BEPS and Pillar Two have introduced major changes to international corporate taxation

These foundations provide useful context for understanding the OECD/G20 Base Erosion and Profit Shifting, or BEPS, Project.

BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to shift profits to locations where there may be little or no underlying economic activity or to erode tax bases.

The BEPS Project introduced a wide-ranging package of measures across 15 Actions, covering areas including harmful tax practices, treaty abuse, transfer pricing, country-by-country reporting and dispute resolution.

International tax reform subsequently expanded through the OECD/G20 Two-Pillar Solution, including Pillar Two.

What is OECD Pillar Two?

Pillar Two establishes a coordinated framework intended to ensure that large multinational enterprise groups within scope are subject to a minimum level of taxation.

Under the Global Anti-Base Erosion (GloBE) Rules, where the jurisdictional effective tax rate calculated under the rules is below 15%, a top-up tax may apply to bring the taxation of relevant excess profits up to the minimum rate.

The rules generally apply to multinational enterprise groups that meet the €750 million consolidated revenue threshold, subject to the detailed scope and exclusions of the framework.

Rather than removing tax competition altogether, the global minimum tax is intended to place a floor under corporate tax competition.

What does Pillar Two mean for Singapore?

Singapore has implemented the Multinational Enterprise Top-up Tax (MTT), which gives effect to the Income Inclusion Rule (IIR), and a Domestic Top-up Tax (DTT) for businesses' financial years beginning on or after 1 January 2025. (See: Global Anti-Base Erosion (GloBE) Rules and Domestic Top-up Tax (DTT))

These measures apply to multinational enterprise groups that fall within the relevant scope requirements.

Singapore's implementation illustrates how developments in international tax policy ultimately interact with domestic tax systems — and why tax professionals increasingly need to understand both the technical rules and the policy environment from which they emerge.

6. International tax is also about how global rules are developed

The programme concluded by widening the discussion from individual tax rules to global tax governance.

International tax standards do not emerge in isolation. Governments, international organisations and other stakeholders influence how international tax policy develops and how those standards are subsequently implemented.

The OECD continues to play a significant role in international tax cooperation, including through the Inclusive Framework on BEPS, the Two-Pillar Solution, tax treaty work and international tax transparency initiatives.

At the same time, international tax cooperation is also developing through the United Nations.

Work is underway on a United Nations Framework Convention on International Tax Cooperation, following the establishment of an intergovernmental negotiating process by the UN General Assembly.

The process, which is scheduled to run from 2025 to 2027, has brought renewed attention to questions concerning participation, representation and how international tax cooperation should develop.

Global tax governance is therefore about more than the substance of individual tax rules. It also concerns the institutions, processes and relationships through which international tax standards are developed.

From technical rules to the bigger picture

Taken together, the six sessions demonstrated the value of looking beyond individual provisions and technical requirements.

International taxation remains a highly technical discipline. But those rules sit within a wider framework involving domestic taxing rights, tax treaties, international coordination, tax competition, anti-avoidance policy and global cooperation.

Understanding that wider context can help tax professionals make sense of developments such as BEPS, OECD Pillar Two, the global minimum tax and the evolving international tax architecture — not only by understanding how particular rules operate, but also by appreciating the policy questions and institutional developments that sit behind them.

Dr Leopoldo Parada and participants of the International Tax Law and Policy Programme

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