Digitalisation and globalisation have significantly impacted daily life, including taxation, resulting in benefits and disadvantages. One major issue lies in the global context, where tax evasion and erosion have become prevalent issues. To address these challenges, the International Organization for Economic Co-operation and Development (OECD) has introduced a new set of rules known as Pillar Two. These rules aim to address the competition for attracting investors through a “race to the bottom” in tax rates by establishing a standardised Global Minimum Tax (GMT) rate of 15% to be applied to economic activities across jurisdictions. Thailand has recently announced its intention to incorporate these rules into domestic tax laws. Consequently, this thesis examined the implications of implementing Pillar Two on allocating taxing rights within the national legislative framework. The research utilised the dogmatic legal method to identify and analyse the current Thai tax system, Pillar Two model rules, and perspectives on implementation. The findings illustrated the most beneficial approach to allocating taxing rights to Thailand.

Aggressive tax planning practices through schemes involving low-tax jurisdictions have been the target of the Organization for Economic Co-operation and Development (OECD) to end harmful tax competition and the so-called “race to the bottom”. Pillar Two Model Rules is the latest OECD way to achieve this objective. This thesis calls into question the design of these rules when applied to the realities of developing countries and argues that the idea that the GloBE Rules are a golden opportunity for source countries to raise significant additional tax revenues seems to fail when confronted with the circumstances of developing countries, mainly source countries. The design of the Pillar Two provisions makes countries’ tax policies intertwined. Therefore, developing countries are not exempt from Pillar Two consequences whether they choose or not to domestically implement its rules. The challenge is real for these countries, which must assess the potential impact on their tax competition and future tax revenues and determine whether the GloBE rules can help them achieve their sustainable development goals. This thesis attempts to give a perspective on what lies ahead for these countries in the Pillar Two new era.

Can a multilateral negotiating process—that is, cooperation between many states in a single forum—successfully reform the network of bilateral tax treaties that currently makes up the bulk of international tax law? The BEPS Project aims to be the first major push for a multilateral tax process since the creation of the OECD’s Model Tax Convention in the 1960s. Through BEPS, the OECD and 130-plus countries are in final negotiations to implement Pillar One and Two, which will: (1) create a new taxing right for “market jurisdiction” countries on the profit of international companies that do business there without a physical presence; and (2) implement a top-up tax levied against companies that offshore profits from intangible assets in low-tax jurisdictions. To predict whether the multilateral reform effort will be successful, it is important to examine the nature of the multilateral negotiating process itself, because every negotiation is shaped by its context.  But this context is not static—rather, the nature of tax multilateralism varies depending on certain global conditions. Sometimes, it is a hierarchical process, dominated by powerful countries operating in a closed-club of developed states spearheading the effort, while weaker countries must tag along and accept the eventual outcome. Alternatively, multilateralism may be egalitarian and inclusive, with many countries—strong and weak alike—contributing to the debate, accepting tradeoffs, and endorsing the outcome. In this thesis, I demonstrate that the nature of tax multilateralism has changed from the former model to the latter by comparing the negotiation of the OECD Model Tax Conventions with the Pillars Negotiation. I begin by identifying several factors that influence the nature of tax multilateralism: first, the distribution of global power among states; and second, the level of integration of the global economy. In an international system where power is concentrated in a few states, and the international economy is fragmented (i.e., the conditions of the 20th Century), multilateralism tends to be hierarchical and exclusive. However, when power is diffused and the global economy is integrated, (the conditions of the 21st Century), then multilateralism is egalitarian and inclusive. In such a context, international tax issues—like base erosion and profit-shifting—are so vast and complex that no state, acting alone or in a small group, could deal with them. The thesis thus concludes that the nature of tax multilateralism has changed, because in modern negotiations, powerful states are both less capable of dominating other states in the negotiating process and are highly dependent on a successful outcome that creates global consensus.