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Pillar Two and the Tax Policy Challenges of the Substance-Based Income Exclusion

Ramon Tomazela

Bulletin for International Taxation2026https://doi.org/10.59403/1pjarjkarticle
ABDC B
Weight
0.50

Abstract

This article critically examines the substance-based income exclusion (SBIE) under Pillar Two, highlighting its conceptual shortcomings, allocative distortions and bias toward tangible-intensive business models. It argues that the current formula inadequately reflects economic reality and proposes alternative approaches for determining routine returns consistent with modern multinational activities.

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https://doi.org/https://doi.org/10.59403/1pjarjk

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@article{ramon2026,
  title        = {{Pillar Two and the Tax Policy Challenges of the Substance-Based Income Exclusion}},
  author       = {Ramon Tomazela},
  journal      = {Bulletin for International Taxation},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.59403/1pjarjk},
}

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Pillar Two and the Tax Policy Challenges of the Substance-Based Income Exclusion

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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