  The Global Minimum Tax (GMT) is applied only to firms above a certain size
threshold. We set up a simple model of tax competition and profit shifting by
heterogeneous multinational firms to evaluate the effects of this partial
coverage of the GMT. A non-haven and a haven country are bound by the GMT rate
for large multinationals, but can set tax rates for firms below the threshold
non-cooperatively. We show that the introduction of the GMT with a moderate tax
rate increases tax revenues in both the non-haven and the haven countries.
Gradual increases in the GMT rate, however, trigger a sudden change in the tax
competition equilibrium from a uniform to a split corporate tax rate, at which
tax revenues in the non-haven country decline. In contrast, gradual increases
in the coverage of the GMT never harm the non-haven country. We also discuss
the quantitative effects of introducing a $15\%$ GMT rate in a calibrated
version of our model.
