- Multinationals with revenues of at least €750 million will pay a minimum effective tax rate of 15% on a country-by-country basis.
- Global minimum tax model rules were published in December 2021, and further commentary and other administrative guidance has subsequently been published by the OECD Inclusive Framework.
- Safe harbours will be available, including a three-year transitional safe harbour based on a company’s country-by-country (CbC) report and/or financial statements.
- The OECD Inclusive Framework has published a standardised information return, including transitional simplified jurisdictional reporting for the first five years.
- Separately, a treaty-based gross level ‘subject to tax rule’ is available for developing countries to include in their treaties – applies to a wide scope of intra-group payments if income is subject to tax at a nominal tax rate below 9%.
- Timing: in the UK an income inclusion rule and a qualified domestic minimum top-up tax apply for accounting periods beginning on or after 31 December 2023. The UK intends to apply the undertaxed profits rule for accounting periods beginning on or after 31 December 2024.
Resources (click to open)
- Update On Latest OECD Developments: Pillar Two (Deloitte EMEA Dbriefs webcast, January 2024)
- OECD Pillar Two: Further guidance (Deloitte tax@hand, December 2023)
- Update On Latest OECD Developments: Pillar One and Pillar Two (Deloitte EMEA Dbriefs webcast, August 2023)
- Pillar Two: OECD Pillar updates (Deloitte tax@hand, July 2023)
- OECD Inclusive Framework publishes outcome statement on Pillar One and Pillar Two (Deloitte tax@hand, July 2023)
- Draft UK legislation to implement Pillar Two global minimum tax rules published (Deloitte tax@hand, March 2023)
- OECD Pillar Two: Information return and safe harbors published (Deloitte tax@hand, December 2022)
- EU formally adopts Pillar Two directive (Deloitte tax@hand, December 2022)
- The tax rules that lie behind Pillar One and Pillar Two (Tax Adviser magazine, November 2022)
- OECD announces release of commentary on Pillar Two model rules for global minimum tax (Deloitte tax@hand, March 2022)
- OECD Inclusive Framework publishes Pillar Two global minimum tax model rules (Deloitte tax@hand, December 2021)
