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Covered or Neutralized? GloBE-Rules Impact on Fiscal Instruments - What are the implications?

Jama, Mohamed Abdulkadir LU (2025) HARN60 20251
Department of Business Law
Abstract
This thesis examines which fiscal instruments are considered as Covered Taxes
under the GloBE Model Rules particularly in the Oil and Gas sector. The countries
used for the examination are Brazil and Nigeria as both have a huge oil and gas
sector. While Brazil has adopted a Qualified Domestic Top-up Tax, Nigeria has
abstained against the Pillar Two framework.
The main research question explores which fiscal instruments utilized in the oil and
gas sector can be classified as a Covered Tax. The author also, examines the
implications of the classification for the Multinational Enterprises. While assessing
whether the tax incentives utilized by Multinational Enterprises are neutralized or
whether they can still be valid... (More)
This thesis examines which fiscal instruments are considered as Covered Taxes
under the GloBE Model Rules particularly in the Oil and Gas sector. The countries
used for the examination are Brazil and Nigeria as both have a huge oil and gas
sector. While Brazil has adopted a Qualified Domestic Top-up Tax, Nigeria has
abstained against the Pillar Two framework.
The main research question explores which fiscal instruments utilized in the oil and
gas sector can be classified as a Covered Tax. The author also, examines the
implications of the classification for the Multinational Enterprises. While assessing
whether the tax incentives utilized by Multinational Enterprises are neutralized or
whether they can still be valid combined with the Covered Taxes and the Substance
Based Carve-out.
The conclusion shows that only a subset of levies imposed on MNEs operating in
the Oil and Gas sector qualify as Covered Taxes. However, due to the tangible assets
and numerous employees entities are able to still utilize tax incentives. The author
identifies the issue of diverging interpretations by the different tax authorities. Which
lead to potentially duplicative taxation for the MNEs. While the GloBE framework
does not have a dispute resolute mechanism. Thereby, the legal uncertainty in the
near future is heightened for the Multinational Enterprises. (Less)
Please use this url to cite or link to this publication:
author
Jama, Mohamed Abdulkadir LU
supervisor
organization
course
HARN60 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Covered Tax, Tax Incentives, ETR, SBIE, Pillar Two
language
English
id
9195140
date added to LUP
2025-06-09 11:31:18
date last changed
2025-06-09 11:31:18
@misc{9195140,
  abstract     = {{This thesis examines which fiscal instruments are considered as Covered Taxes 
under the GloBE Model Rules particularly in the Oil and Gas sector. The countries 
used for the examination are Brazil and Nigeria as both have a huge oil and gas 
sector. While Brazil has adopted a Qualified Domestic Top-up Tax, Nigeria has 
abstained against the Pillar Two framework. 
The main research question explores which fiscal instruments utilized in the oil and 
gas sector can be classified as a Covered Tax. The author also, examines the 
implications of the classification for the Multinational Enterprises. While assessing 
whether the tax incentives utilized by Multinational Enterprises are neutralized or 
whether they can still be valid combined with the Covered Taxes and the Substance 
Based Carve-out. 
The conclusion shows that only a subset of levies imposed on MNEs operating in 
the Oil and Gas sector qualify as Covered Taxes. However, due to the tangible assets 
and numerous employees entities are able to still utilize tax incentives. The author
identifies the issue of diverging interpretations by the different tax authorities. Which 
lead to potentially duplicative taxation for the MNEs. While the GloBE framework 
does not have a dispute resolute mechanism. Thereby, the legal uncertainty in the 
near future is heightened for the Multinational Enterprises.}},
  author       = {{Jama, Mohamed Abdulkadir}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Covered or Neutralized? GloBE-Rules Impact on Fiscal Instruments - What are the implications?}},
  year         = {{2025}},
}