The Pillar Two undertaxed profits rule could, in theory, be susceptible to challenge under applicable double tax agreements (for example, under business profits or non-discrimination articles). However, even if theoretically possible, there are practical obstacles to raising such a challenge and it is uncertain how, if a UTPR charge was challenged under the mutual agreement procedure of a DTA, countries’ competent authorities would approach the issue. A multilateral convention would presumably be needed to resolve such uncertainties. In the meantime, businesses must continue to navigate an uncertain international tax landscape.

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