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This chapter argues that the current revolution in international tax continued in the two pillars of BEPS 2.0 have roots in existing developments from older tax regimes. Therefore, it concludes that the current revolution is less revolutionary than many have argued. Specifically, the chapter discusses how Pillar One derives from efforts to redefine the source of active income considering the digital revolution, which builds on US states’ use of sales factors since the 1930s as a source of corporate income. For Pillar Two, the chapter argues that the single tax principle implemented by Pillar Two can be traced back to the first model treaty from 1927. However, there are new elements worth appreciating, which include the new dynamics in the trilemma (open economy, tax competition, and social safety net) due to the global minimum tax, digital taxation, the emergence of market jurisdictions in revenue competition, the strengthening of multilateral cooperation in international tax matters, the tension between multilateralism and unilateralism, and the emphasis on the equity and inclusiveness.

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8 - Evolution or Revolution?

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8 - Evolution or Revolution?

Summary