global minimum corporate tax

Pillar Two updates

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In this blog you will be informed about the latest news on the implementation of a global minimum corporate tax, also known as Pillar 2.

Pillar 2 is a minimum tax that will be introduced for companies with a group turnover of more than EUR 750 million. Group entities of these groups located in countries that have adopted Pillar 2 (including the EU and many other countries) will be affected by this new tax. These groups must calculate which group entities are subject to a corporate income tax of less than 15% at the jurisdiction level, based on the "Pillar 2" calculations. When certain group entities are taxed at a lower rate than 15%, a top-up tax will be levied on these group entities that are located in countries that implemented Pillar 2. This top-up tax will be levied through a separate tax system that is independent of e.g. the current corporate income tax system. For more information on the legislation, we would like to refer to this page.

Jersey and Isle of Man to Implement OECD’s Pillar Two Tax Framework


The Governments of Jersey and the Isle of Man have announced plans to align with the OECD’s Pillar Two global tax framework, ensuring multinational enterprises (MNEs) pay a minimum corporate tax rate of 15% globally. They also highlight the commitment of both jurisdictions to fair taxation while supporting their economies and maintaining their reputations as reputable financial centres.

Starting in 2025, Jersey will implement an Income Inclusion Rule (IIR) and a new Multinational Corporate Income Tax (MCIT) for multinational groups with annual turnovers over 750 million Euros. The MCIT will align with the OECD GloBE Model Rules so that Jersey companies and Jersey branches of in-scope multinational groups pay an effective rate of 15% on their profits. Jersey will not be enacting an Undertaxed Profits Rule at this time.

From January 2025, the Isle of Man will introduce a Qualified Domestic Minimum Top-Up Tax (QDMTT) for MNEs with annual turnovers exceeding 750 million Euros, ensuring a 15% tax rate on Island-generated profits.

Find out more:

European Commission Issues Reasoned Opinions to Six Member States Over Tax Directive Non-Compliance


Today, the European Commission took a significant step by issuing so-called reasoned opinions to Spain, Cyprus, Latvia, Lithuania, Poland, and Portugal. These countries have failed to notify measures for transposing the EU Pillar 2 Directive, into their national laws. 

The Pillar 2 Directive mandates that all groups with a turnover must pay a minimum effective tax rate of 15% at the jurisdictional level. The Commission views this as a top priority. All EU Member States were required to enact the necessary laws to comply with this directive by 31 December 2023. While most member states have fulfilled this obligation, Spain, Cyprus, Latvia, Lithuania, Poland, and Portugal have not yet notified their implementing measures.

As a result, the European Commission has issued reasoned opinions to these six countries. They now have two months to respond and take the necessary actions to comply. Failure to do so may lead the Commission to refer the matter to the Court of Justice of the European Union.

Notification obligation for Belgian Pillar 2 group companies and deadline 13 July



The Belgian authorities published rules about the information requirement for Belgian companies that are part of a Pillar 2 group. The rules state that these entities are required to register at the Belgian Trade Register (KBO) and to submit a notification form. To be able to register at the KBO and submit this notification form, the Pillar 2 group must also be registered at the MinFin portal. This notification must occur at the latest 30 days after the beginning of the financial year during which the group is in the scope of Pillar 2. As this regulation was only published on 15 May 2024, the deadline for the financial year 2024 (when it started on 1 January 2024) is postponed to 13 July 2024.

Filing obligation

The notification must be submitted either by the Belgian ultimate parent company or - when this entity is not located in Belgium - by the Belgian group entity.

What to report in notification?

  • In Part 1, general information regarding the group should be provided. This is the group name, address, and contact details and information about the financial year.
  • In part 2, information should be provided about the consolidated financial statements.
  • In part 3, information should be provided on the entities in scope of the Pillar 2 group. In this part, it should be specified how each entity qualifies for Pillar 2 (e.g. the intermediate parent entity, investment entity, partially owned parent entity, flow-through entity etc.).
  • In part 4, information should be provided regarding the reporting entity.

Dutch government expects little effect Pillar 2 on innovation box


In a response letter to the Dutch parliament, the Dutch government indicated that it does not expect a substantial effect of Pillar 2 on the innovation box. The innovation box is a Dutch tax regime based on which qualifying profits from innovative activities are effectively taxed against 9%. This is below the threshold of 15% for Pillar 2 purposes. In principle, this implies that the Netherlands will impose a national top-up tax to ensure that Dutch resident taxpayers are effectively taxed against 15%.

However, the Dutch government specified that most companies that use the innovation box are also partly subject to the regular corporate income tax rates for non-qualifying profits. Therefore, the government expects that few companies that apply the innovation box will be effectively taxed below 15%.

Tax authorities send Pillar 2 letter to taxpayers


Since the beginning of March, the Dutch tax authorities have been sending letters to Dutch taxpayers whom they expect to fall within the scope of Pillar 2 (part of a group with a consolidated turnover of 750 million euros or more). The letter informs these taxpayers that the Minimum Tax Act has been implemented and that these taxpayers possibly fall within the scope of the Minimum Tax Act. According to the tax authorities, this implies that these taxpayers should investigate whether they fall under Pillar 2.

If so, the taxpayers in the scope of Pillar 2 face compliance obligations with a first due date in 2026 (information return and possibly a top-up tax return). To determine which Dutch taxpayers potentially fall within the scope of Pillar 2, the Dutch tax used the country-by-country notifications (or reports) as this filing obligation also uses a consolidated turnover threshold of 750 million euros.   

Dutch State Secretary does not anticipate lower revenues Pillar 2


The Dutch State Secretary of Finance has responded to parliamentary inquiries concerning the Pillar 2 regarding American multinationals. Recent media reports have suggested that several American multinationals adjusted their corporate structures in the past year to evade additional taxes as a result of Pillar 2. However, the extent of this and the impact of global implementation of Pillar 2 on such corporate restructuring remain unknown. Nonetheless, he foresees no decrease in revenues due to the introduction of Pillar 2 in the Netherlands. The anticipated revenue for the Netherlands stands at approximately €466 million annually.

Amendments to Pillar 2 Income Taxes Disclosed in RJ Accouncements 2024-3 and 2023-14


The Council for Annual Reporting has published several amendments in RJ-announcement 2024-3, as proposed in RJ-announcement 2023-14, regarding Pillar 2 income taxes.

In RJ-announcement 2023-14 'Draft paragraphs regarding Pillar 2 income taxes', the RJ proposed to add the following to the relevant chapter:

  • the clarification that Pillar 2 income taxes fall within the scope of chapter 272 'Income taxes';
  • the mandatory temporary exception for the recognition of deferred tax assets and liabilities related to Pillar 2 income taxes;
  • disclosure requirements regarding (recharged) Pillar 2 income taxes; and
  • disclosure requirements to provide insight into the expected effects of Pillar 2 legislation.

In response to comments received on the RJ-announcement, it is clarified in the Guidelines for micro and small legal entities that the disclosure requirements regarding Pillar 2 income taxes, to the extent relevant, may be limited to the principles. The legal entity may consider including the other disclosures mentioned in the RJ bundle.

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Implementation of Pillar 2 in EU Member States almost completed


We are already in the second week of Pillar 2. Almost all EU Member States enacted the Pillar 2 legislation. Spain, Cyprus, and Greece published draft legislation, but this has not been implemented yet. Only Poland and Portugal did not publish a full draft version of their local Pillar 2 legislation. 


The Dutch senate adopts the Dutch Minimum Tax Act


Today, the Dutch senate adopted the Dutch Minimum Tax Act (the Dutch implementation of Pillar 2). This means that the Dutch version of Pillar 2 will officially come into force as of January 1, 2024. Subsequently, the first Dutch Pillar 2 Information Return and Tax Return are expected to be due in June and August 2026 respectively.

The new minimum tax is relevant for groups with a consolidated revenue of over 750 million euros in the fiscal year of 2021 or 2022. For the Netherlands, this implies that an additional top-up tax may be levied at Dutch taxpayers in one of the following circumstances:

  • when the effective tax rate in the Netherlands is less than 15%, or;
  • when the Netherlands is allowed to impose a top-up tax for profits of other group companies that are taxed at a rate of less than 15%.

Only if the safe harbours apply, the top-up tax would be set at zero. 

Five EU countries to postpone Pillar 2


Estonia, Latvia, Lithuania, Malta, and Slovakia have postponed the application of the income inclusion rule and the undertaxed payment rule (UTPR). They can do this because twelve or fewer ultimate parent entities of multinational groups in the scope of Pillar 2, are situated in these countries. The Pillar 2 Directive then allows the countries to postpone Pillar 2 for six consecutive years, starting from 31 December 2023. The EU member states have to notify the European Commission of the decision to postpone the IIR and the UTPR on or before 31 December 2023. The five countries have done so on 12 December 2023. 

EU Commission issues amendments to Regulation (EU) 2023/1803 as regards International Accounting Standard 12


As of 8 November 2023, the European Commission has adopted the amendments on International Accounting Standard 12 (IAS 12) issued by the IASB on 23 May 2023, which pertains to income taxes. These amendments specifically address the impact of the (OECD) Pillar Two Minimum Tax rules on deferred taxes. The exceptions apply exclusively to income taxes resulting from tax laws enacted or substantively enacted to implement the Pillar Two model rules. This encompasses laws that implement qualified domestic minimum top-up taxes as outlined by the OECD.

Due to the amendments, entities are exempted from the typical requirements of IAS 12, relieving them from the obligation to recognize information about deferred tax assets and liabilities related to Pillar Two income taxes. Entities are mandated to disclose the application of this exception regarding the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes.

Furthermore, entities must separately disclose their current tax expense (income) related to Pillar Two income taxes. In periods where Pillar Two legislation is enacted or substantively enacted but not yet in effect, entities are required to disclose known or reasonably estimable information about their exposure to Pillar Two income taxes arising from that legislation.

The disclosure requirements become effective for annual reporting periods starting on or after January 1, 2023. A company is not required to apply the disclosure requirements in interim financial reports for interim periods ending on or before 31 December 2023.

Find out more via this link

Dutch House of Representatives adopts Pillar 2 proposal


Last night, the Dutch House of Representatives (Tweede Kamer) has adopted the Pillar 2 proposal ‘Wet Minimumbelasting 2024’. The only obstacle left for the ‘Wet Minimumbelasting’ to enter into force on 1 January 2024, is the approval of the Senate (Eerste Kamer). This voting is expected to take place before the ending of this year.

Dutch government publishes amendments to Pillar 2 implementation proposal


On Friday, October 13, an amendment proposal was published regarding the implementation of the Pillar 2 minimum taxation in the Netherlands. These amendments aim to bring the Dutch legislative proposal more in line with OECD definitions and contain certain additions to the rules.

The most notable additions are the new Safe Harbors, which were announced in July 2023 in a further Administrative Guidance from the OECD. These encompass the undertaxed profit rule and the domestic top-up tax.

Safe harbour for the Qualified Domestic Minimum Top-up Tax

The first safe harbour that was added to the proposal concerns the Qualified Domestic Minimum Top-up Tax. This QDMTT safe harbour specifies that Dutch group entities do not need to make a separate QDMTT calculation for other group companies when the countries of residency of these entities implemented a top-up tax which meets certain conditions. The QDMTT safe habour aims to reduce the administrative burdens for Dutch group companies and ensures that a multinational group does not have to perform two different calculations for the same entities.

Transitional UTPR Safe Harbours

Additionally, the Dutch legislator has acknowledged that it may be undesirable to apply the undertaxed profit rule to Ultimate Parent Entities (UPE) in states that have not yet implemented a qualifying domestic top-up tax or income inclusion rule. The amendment prevents this with the introduction of the temporary undertaxed profit safe harbor. This UTPR safe harbour specifies that Dutch group companies do not need to add a top-up tax for undertaxed profits of UPE’s in non-pillar 2 countries, when the statutory tax rate in the UPE country is at least 20%. This means that the Netherlands will not apply the undertaxed profits rule to Ultimate Parent Entities that are located in a jurisdiction that has implemented Pillar 2, but does have a statutory corporate income tax rate of 20% or more.

Pillar 2 will reduce global low-taxed profit by about 70%


The OECD expects that global low-taxed profit (i.e. profit that is taxed at an ETR of less than 15%) will reduce by 70%. This estimate was presented at the latest OECD Tax Talk by David Bradbury, deputy director at the OECD’s Centre for Tax Policy. 
Bradbury said: "All of this is to highlight the simple fact that all jurisdictions we observe, have substantial pockets of low tax profit and that means that the global minimum tax is of critical importance to all jurisdictions, including developing countries, even countries that have higher statutory tax rates. This really does highlight the importance of putting in place a domestic minimum top up tax (QDMTT) to ensure not only that the source jurisdiction is able to collect that additional tax that is going to be collected somewhere, but that it will be able to do that in a way that does not have any adverse impact on its competitiveness when it comes to attracting foreign direct investment".

The OECD’s full analysis will be published by the end of the year.

Tax Foundation publishes estimated tax revenue of Pillar 2


On October 10, Tax Foundation published an overview of the additional corporate income tax revenue that countries expect to obtain due to the implementation of Pillar 2. Based on the available country calculations, the expected corporate income tax revenue will increase from 0.8 percent in Australia to 4.0% in the UK. This is much less than the expectations of the OECD (+ 9.0%) and the IFM (+ 5.7%). 

The Dutch government expects that the increased tax revenue will amount to 400 to 500 million Euro. This implies an increase 1.5 – 2.0%. 

In Germany, the expected revenue will be 2.245 billion Euro. This implies an increase of 2.8 – 3.2%. 

The full article can be found here.

The OECD/G20 Inclusive Framework on BEPS adopts multilateral convention to facilitate Subject to Tax Rule


The recently introduced Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule is an integral component of the Two-Pillar Solution devised to address the tax challenges stemming from the digitalization of the economy. This Convention, now open for signing, represents significant progress in the completion of work under Pillar Two. 

The Subject to Tax Rule (STTR) is designed to enable developing nations to tax specific intra-group payments in cases where these payments are subject to a nominal corporate income tax rate below 9%. The STTR grants source jurisdictions, where the covered income originates, the authority to levy a tax when, under the terms of tax treaties, they would otherwise be unable to do so. The STTR is meant as a benefit for developing countries to mitigate the negative effect Pillar 2 has on the taxing rights of these countries.

This new multilateral instrument, as outlined in the Inclusive Framework Outcome Statement on the Two-Pillar Solution in July 2023, will allow countries to effectively implement the STTR within their existing bilateral tax treaties. Over 70 developing members of the Inclusive Framework have the right to request the inclusion of the STTR in their agreements with Inclusive Framework Members that apply corporate income tax rates below 9% to covered payments.

OECD Secretary-General Mathias Cormann: "Adoption of this new multilateral instrument builds upon the Outcome Statement delivered in July, marking significant progress toward full implementation of global tax reform. It reflects the constructive collaboration of the international community in delivering solutions for developing countries. Importantly, the Subject to Tax Rule encompasses comprehensive provisions to ensure that developing nations can 'tax back' payments sourced within their jurisdiction when these payments are not subject to taxation at a minimum rate in a partner jurisdiction. The availability of the multilateral instrument for signing represents further advancement towards the implementation of the Pillar Two minimum tax, underscoring a substantial stride toward stabilizing the international tax system and making it more equitable and effective."

Find out more via this link

Dutch Secretary of Finance answers questions sent in by members of Dutch parliament


On September 9th, the Dutch Secretary of Finance, Van Rij, has sent the ‘Nota naar Aanleiding van het Verslag’ to the Dutch Parliament, in which Van Rij answers questions sent in by members of Dutch Parliament. In the document he also describes the impact of the following Dutch CIT-rules on the global minimum corporate tax:

  1. The earningsstrippingmeasure;
  2. The CFC-rules;
  3. The measures against hybrid mismatches;
  4. The withholding tax on interest and royalties;
  5. The restriction on the liquidation- and strike loss scheme;
  6. The restriction of the settlement of losses; and
  7. The measures to combat mismatches when applying the arm’s-length principle.  

Furthermore, the Secretary of Finance addresses the compatibility of existing tax treaties with this global minimum tax. Van Rij says that the Inclusive Framework has stated that Pillar 2 complies with the provisions from the OECD- and UN-model treaties for tax treaties. According to Van Rij, this means that there is no need to adjust existing tax treaties. 

In the coming months, the Pillar 2 proposal will be further discussed within Dutch Parliament. 

Find out more via this link

Canada, Luxembourg and Vietnam release Pillar 2 proposals 


Canada, Luxembourg and Vietnam have recently released new proposals to implement Pillar 2 as set out by the OECD. 

As far as known, there are no notable differences between the proposals and the OECD Model Rules on Pillar Two. The proposal published by Luxembourg strictly adheres to the EU Directive on Pillar 2. All three countries aim to implement the IIR and the QDMTT for fiscal years starting January 1, 2024. The UTPR is set out to be applicable for fiscal years starting on or after December 31, 2024. All proposals are now subjected to public consultations.

The new tax treaty between The Netherlands and Belgium will not have precedence over the application of Pillar 2 


On June 21, 2023, The Netherlands and Belgium signed a new tax treaty. In this new tax treaty, a provision regarding Pillar 2 has been added which says that nothing in the treaty will stand in the way of the application of Pillar 2. This provision was added because the tax treaty is signed later than the European Pillar 2 Directive. On the basis of international treaty law, the tax treaty would, without such a provision, have precedence over Pillar 2. However, with this provision, it is ensured that the tax treaty will not obstruct the application of Pillar 2. As a consequence, Pillar 2 will take precedence over the tax treaty, if a conflict between the tax treaty and Pillar 2 arises. 

It is expected that all new tax treaties between countries that have approved Pillar 2 will have a comparable provision, to ensure an unobstructed application of Pillar 2. As such, member states step over the potential obstruction that the tax treaty network may pose to the execution of Pillar 2.

138 countries and jurisdictions agree historic milestone to implement global tax deal 


On July 11, 2023, 138 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) agreed an Outcome Statement recognising the significant progress made and allowing countries and jurisdictions to move forward with historic, major reform of the international tax system. The Outcome Statement was agreed upon after 20 months of intense technical negotiations to implement the Two Pillar Solution.  

The Outcome Statement summarises the package of deliverables developed by the Inclusive Framework to address the remaining element of the Two-Pillar Solution. The package reflects compromises made by small and large jurisdictions, developing and developed countries, and source and residence jurisdictions alike. With regard to Pillar Two, the Inclusive Framework has completed and delivered a Subject-to-Tax-Rule (STTR) model provision and commentary and a Multilateral Instrument (MLI) together with an Explanatory Statement.

The STTR will enable developing countries to update bilateral tax treaties to “tax back” income on certain intra-group income where such income is subject to low or nominal taxation in the other jurisdiction. The STTR will be implemented via the MLI, which will amend the treaties that it covers.  

OECD Secretary General Mathias Cormann says: “The Two-Pillar Solution will provide stability for the international tax system, making it fairer and work better in an increasingly digitalised and globalised world economy. We have all been working intensively on the technical details and on the implementation arrangements that are necessary to make the Two-Pillar Solution a reality.

The agreement reached yesterday proves that despite the challenges and compromises along the way, multilateral dialogue works and can deliver results to tackle shared challenges requiring shared solutions. This work is critical to governments and our economies –ultimately, to be able to raise the necessary revenue to fund the essential public goods and services for their citizens.” 

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Dutch government terminated 


On the evening of July 7, 2023, it became clear that the Dutch government is terminated because of a disagreement between the coalition partners over asylum policies. Because of the collapse, new elections will be held on November 22, 2023. It is not expected that the collapse of the Dutch government will have any impact on the implementation of Pillar 2. The proposal ‘Wet Minimumbelasting 2024’ is expected to be discussed and approved by Dutch Parliament after the summer break. After the approval of both the First and Second Chamber, the ‘Wet Minimumbelasting 2024’ will enter into force on January 1, 2024.  


Germany publishes updated Pillar 2 proposal 


Today, the German Ministry of Finance published an updated proposal to implement Pillar 2. The changes are mainly an implementation of the relevant provisions from the Administrative Guidance that was published by the OECD last February.  

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The implementation of Pillar 2 could cost the United States 122 billion dollars


If the US does not implement Pillar 2 domestically, according to a revenue score released by The Joint Committee on Taxation (JCT), a widespread implementation of Pillar 2 by 2025 would cost the US 122 billion dollars. If the US implements Pillar 2 by 2025, the costs would be reduced to 56.5 billion dollars. The cost estimate is expected to further light the discussion about Pillar 2 between Republicans and Democrats over how Congress and the White House should move forward on international taxes.   

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The Swiss people voted in favor of Pillar 2 


Yesterday, Switzerland held a referendum on the global minimum corporate tax, also known as Pillar 2. An unusual strong number of almost 80% voted in favor of the new minimum tax for multinational corporations. The new legislation is expected to enter into force on January 1st, 2024. In-scope companies will subsequently have to pay a minimum corporate tax of 15% in Switzerland. The combined Swiss federal and cantonal/communal income tax rates are currently typically between 11%-13%. Around 500 Swiss TopCos and around 2.000 Swiss based subsidiaries are expected to be in scope of Pillar 2. "This ensures that Switzerland will not lose any tax revenue to foreign countries," Finance Minister Karin Keller-Sutter said. "It will on top also create legal certainty and a stable framework."

Cantons that will be required to increase its tax revenue for in-scope tax payers may in general use the bulk of that additional tax revenue at its own discretion. Most cantons will use such additional fiscal revenue to strengthen the attractiveness of their canton for corporate entities and for lowering the tax burden for individuals.

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House Republicans propose retaliatory taxes for Pillar 2


The U.S. is one of the biggest countries that is opposed to implementing Pillar 2. To show their discontent with Pillar 2, House Republicans on the Ways and Means Committee have proposed legislation that would impose retaliatory taxes on taxpayers from countries that implement aspects of Pillar 2. The proposed legislation would impose a series of income tax and withholding taxes on foreign citizens, corporations, and partnerships of countries that impose either an “exterritorial tax” or “discriminatory tax”. Foreign individuals, corporations, and certain partnerships from a country imposing one of these taxes would be subject to increased rates on many income and withholding taxes.

The proposal appears at this point to be largely a messaging exercise. House Ways and Means staff have acknowledged that the goal is not actually to collect the taxes but to encourage foreign governments not to implement certain Pillar 1 or 2 taxes.

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Final legislative proposal Pillar 2 published


On 31 May 2023, the Dutch government published the final legislative proposal for the implementation of Pillar 2. The final proposal is mostly in line with the consultation document which was published in October 2022. In the coming weeks, we will further update you on the key features of the final legislation proposal and where this differs from the consultation document. However, here are some of the noticeable features of the proposal in this update:

Tax returns

As already published, the Pillar 2 top-up taxes will be levied through separate tax returns (not the regular corporate income tax return). This implies that apart from the regular CIT returns, Dutch group companies must file a Pillar 2 information return and a Pillar 2 tax return. The payment of the top-up taxes must be made when filing the tax return. Contrary to corporate income tax, payment will thus not occur on receipt of a (final) tax assessment.

Liability for tax debts

The State Secretary of Finance confirmed that Dutch group entities will be jointly and severally liable to Pillar 2 tax debts. This does not only apply to the tax debts of Dutch group entities, but also to the tax debts for non-Dutch group companies. The Dutch government will use information agreements with other jurisdictions to receive the relevant information in order to impose this taxation on the Dutch entities.  

Tax treaty application

The Dutch State Secretary confirmed that the Pillar 2 top-up taxes will fall within the scope of the tax treaties as it concerns a profit tax. Usually, the implementation of new taxes will be communicated with the tax treaty partners. The State Secretary of Finance mentioned that this does not have to take place for Pillar 2 given that it is already discussed within the OECD network and the EU.

Enforceability analysis

Although the new rules of Pillar 2 are quite extensive, the Dutch government indicated that the burden of this new legislation on the Dutch tax authorities is medium. In light of all tasks and responsibilities that the Dutch tax authorities already bear with recent introductions of new tax legislation, this might be a little optimistic, but mostly provides more certainty on the fact that the Netherlands will not back down from implementing Pillar 2 in 2024.

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Pillar 2 - Case brought before the General Court of the European Union


A case has been brought before the General Court of the European Union in which the applicant seeks to annul parts of the Pillar 2 Directive. It concerns the scope of the national tonnage regimes and the tonnage regime as specified in Pillar 2.

Article 17 of Pillar 2 excludes from its scope income from shipping activity covered by a Member States’ tonnage tax regimes authorized under State aid rules. However, this Pillar 2 definition of shipping income does not always align with the national provisions determining income from shipping activities. Therefore, the scope of excluded shipping income under Pillar 2 could have a negative effect on the taxation of current domestic shipping income.

Pillar 2 does not provide for transitional measures for taxpayers who will face issues due to these deviating definitions of income which falls under shipping activities. The applicant of the court case provides 5 reasons to substantiate the annulment request:

  • Infringement of the general principle of equal treatment;
  • Infringement of the general principle of proportionality because the effect of Pillar 2 exceeds what is necessary to achieve its purpose;
  • Infringement of the principle of proportionality because Pillar 2 also applies to purely domestic situations;
  • Infringement of the principle of protection of legitimate expectations and legal certainty;
  • Infringement of the State Aid articles.

It is now up to the Council of the European Union to submit a statement of defence before the 4th of June

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The OECD releases an administrative guidance for the Pillar 2 GloBE Rules


The document that was published today includes guidance on the recognition of the United States' minimum tax (known as the Global Intangible Low-Taxed Income or "GILTI") under the GloBE Rules and on the design of Qualified Domestic Minimum Top-up Taxes.

It also includes more general guidance on the scope, operation and transitional elements of the GloBE Rules to allow Inclusive Framework members that are in the process of implementing the rules to reflect this guidance in their domestic legislation in a coordinated manner. "The release of today's guidance represents the final but significant piece of work on the GloBE Rules that the Inclusive Framework members had committed to deliver as part of the implementation framework, while this brings an end to the work we had set for ourselves in October 2021, we will continue, over the coming months, to work hard to ensure that the rules are implemented in a coordinated and administrable manner. This will include listening to stakeholders on how the operation of the rules can be further refined to reduce compliance costs and achieve better tax certainty for business and how we can optimise the information to be reported in the GloBE Information Return, while also developing a robust and transparent peer review process and expanding our capacity building efforts," said Grace Perez-Navarro, Director of the OECD Centre for Tax Policy and Administration.

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The OECD agrees on the design of a safe harbour and a transitional penalty regime


In order to mitigate the acute compliance burden that arises from the Minimum Tax Act 2024, the OECD has published its ‘safe harbours and penalty relief’ document. The document includes a transitional safe harbour, a permanent safe harbour and a transitional penalty relief regime. Furthermore, the OECD is also working on a Qualified Domestic Minimum Top-up Tax (QDMTT) safe harbour that would provide compliance simplifications for MNEs operating in jurisdictions that have adopted a QDMTT (the Netherlands have adopted a QDMTT). The QDMTT allows the Netherlands to tax any Top-up Tax from any Dutch low-taxed entities.

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The EU has formally adopted the Pillar Two directive


After the statement on December 12th 2022, the EU has now also formally adopted the directive to implement a global minimum corporate tax. All 27 EU member states have unanimously voted for the implementation of Pillar Two in the European Union.

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BREAKING: The EU reaches an agreement on the global minimum corporate tax


Today, the EU Council announced that EU member states have reached an agreement in principle to implement Pillar Two at EU level. This means that Hungary, as last EU member state, has dropped its resistance. The directive has to be implemented into EU member states’ national law by the end of 2023. 
“I am very pleased to announce that we agreed to adopt the directive on the Pillar 2 proposal today. Our message is clear: The largest groups of corporations, multinational or domestic, will need to pay a corporate tax that cannot be lower than 15%, globally,” Said Zbyněk Stanjura, Minister for Finance of Czechia. 

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The consultation on the Dutch draft Pillar Two legislation is closed today


After more than a month, the public consultation of the Dutch draft Pillar Two legislation was closed today. The consultation resulted in 16 public reactions.

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The Netherlands publishes draft Pillar Two legislation


The Netherlands has published the draft Pillar Two legislation (Wet Minimumbelasting 2024), including extensive commentary on the draft legislation which should come into effect on January 1st 2024. This draft legislation is based on the third compromise text as presented by the European Commission on June 16th 2022. Hungary is the only EU member state that has not yet agreed to the compromise text. Nevertheless it is expected that the final text of the Directive will be similar to the third compromise text, which is largely based on the model rules published by the OECD on December 20th 2021. 
At the same time, a public consultation is opened, to enable everyone to comment on the draft legislation. The consultation is opened until December 5th 2022.

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France, Germany, Spain, Italy and The Netherlands publish a joint statement in which they reaffirm their strengthened commitment to swiftly implement the global minimum effective corporate taxation


At Ecofin in June 2022 it turned out that the global minimum corporate tax is supported by 26 out of 27 EU member states. Hungary is the only EU member state left still resisting. Therefore France, Germany, Spain, Italy and The Netherlands feel the need to express their intention to swiftly implement the global minimum effective corporate taxation. 
“Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment. We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means. We are also fully committed to complete the work on the better reallocation of taxing rights from huge global multinationals’ profits with the objective of signing a multilateral convention by mid-2023,” said the five countries.

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The European Commission publishes a third compromise text of the proposal for a directive aiming to implement Pillar Two in the European Union


Earlier today, the European Commission has published a third compromise text of the proposal for a directive aiming to implement Pillar Two in the EU.

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The OECD releases a detailed commentary to the GloBE Rules


The OECD has released a detailed commentary to the GloBE Rules. The commentary explains the intended outcomes under the GloBE Rules and clarifies the meaning of certain terms. The commentary also illustrates the application of the rules to certain fact patterns. “The release of the Commentary today is a significant achievement which concludes many months of hard work by Inclusive Framework members in reaching a detailed agreement on the substantive provisions of the GloBE Rules. With the completion of the technical work on the Model Rules and Commentary, Inclusive Framework members now have all the tools they need to begin implementing the rules," Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration said.

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The European Commission (EC) presents a proposal for a directive aiming to implement Pillar Two in the European Union


The European Commission has presented a proposal for a directive aiming to implement Pillar Two in the European Union. The proposal is very similar to the GloBE rules, apart from some adjustments designed to guarantee conformity with EU-law. All EU member states need to agree in order for the proposal to be adopted. Once the directive has been implemented by the member states, the directive should come in effect on January 1st 2023.

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The OECD publishes model rules to implement Pillar Two


The OECD has published model rules to implement Pillar Two. These Global Anti-Base Erosion Rules (GloBE) should ensure that multinationals pay a minimum level of tax. The GloBE Rules provide for a coordinated system of taxation that imposes a top-up tax on profits arising in a jurisdiction whenever the effective tax rate, determined on a jurisdictional basis, is below the minimum rate of 15%. The rules apply to companies with revenues above EUR 750 million. These rules are scheduled to be implemented by 2023.

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The OECD has reached a ground-breaking agreement on a global minimum corporate tax


On October 8th 2021 a political agreement to reform the international tax system has been reached in the Inclusive Framework, organised by the OECD. The current international tax system is said to be no longer fit for purpose in a globalised and digitalised economy. The deal was agreed by over 130 jurisdictions. The agreement consists of two so called Pillars. Pillar One will ensure a fairer distribution of profits and taxing rights among countries with respect to the largest and most profitable multinationals. Pillar Two introduces a global minimum corporate tax rate of 15%, which will apply to multinationals with a revenue above EUR 750 million. 
“Today’s agreement will make our international tax arrangements fairer and work better. This is a major victory for effective and balanced multilateralism. It is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalised and globalised world economy. We must now work swiftly and diligently to ensure the effective implementation of this major reform,” OECD Secretary-General Mathias Cormann said.

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Tax authorities send Pillar 2 letter to taxpayers