This chapter analyses the two pillars of the Unified Approach and the Global Anti-Base Erosion Proposals in the light of alternative policy choices which were available to the OECD. These major alternative policy choices include destination-based cash-flow taxation, residual profit allocation by income, formulary apportionment and expanding the concept of permanent establishment. In each case these policies are explained and the advantages and disadvantages of the major policy discussed. Each policy is then analysed to see what it has contributed to the 2020s compromise and what further contribution it might make to international tax reform in the future.What emerges from this analysis is that key elements of the reform owe much to the destination basis of taxation present in the various alternative reform options and selectively adopted in particular by the Unified Approach in Pillar One.

This chapter analyses the two pillars of the Unified Approach and the Global Anti-Base Erosion Proposals in the light of alternative policy choices which were available to the OECD. These major alternative policy choices include destination-based cash-flow taxation, residual profit allocation by income, formulary apportionment and expanding the concept of permanent establishment. In each case these policies are explained and the advantages and disadvantages of the major policy discussed. Each policy is then analysed to see what it has contributed to the 2020s compromise and what further contribution it might make to international tax reform in the future.What emerges from this analysis is that key elements of the reform owe much to the destination basis of taxation present in the various alternative reform options and selectively adopted in particular by the Unified Approach in Pillar One.