Typically, the tax treaty entitlement to fiscally transparent entities (‘FTEs’) has been a matter of debate in the arena of international tax. FTEs are not taxed at the entity level but at the level of the persons who have an ownership interest in that entity. Hands down, it is one of the...

The author analyzes the contours of the formulaic substance-based carve-out enshrined in the Pillar Two Blueprint. She also evaluates whether a carve-out stands vindicated in the context of Pillar Two and signs off with possible alternatives