Estonia
On 2 May 2024, Estonia published in the Official Gazette, the return requirements for the Pillar 2 global minimum tax of Council Directive (EU) 2022/2523. Estonia has opted to delay the application of the income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR). As such, the Act only partially transposes certain provisions required by the Directive, including rules on the determination of the location of group constituent entities and minimum tax return (declaration) requirements.
https://orbitax.com/news/archive.php/Update—Estonia-Publishes-Act-55653
Belgium
As previously reported, the Belgian Chamber of Representatives approved the law on miscellaneous tax provisions on 2 May 2024 including measures for the reform of the investment deduction. Other important measures concern the Pillar 2 global minimum tax, including measures for the incorporation of the latest OECD administrative guidance and certain other adjustments to the global minimum tax law approved in December 2023. Key measures include:
The incorporation of the administrative guidance issued by the OECD in December 2023 with respect to the application of the transitional CbC safe harbors, including the application of the anti-hybrid rules;
The correction of the safe harbor for MNE groups in the initial phase of their international activity to clarify that the extension of the safe harbor to the application of the IIR only applies where the jurisdiction of the ultimate parent entity is low-taxed;
The amendment of the innovation deduction to allow taxpayers to limit the use of the deduction in a given year in order to ensure a minimum tax rate of 15%, with the remaining deduction allowed to be carried forward indefinitely;
The addition of provisions to allow MNE groups to elect for each constituent entity to include dividends from all their portfolio shareholdings in their computation of GloBE income or loss, in accordance with administrative guidance issued by the OECD in February 2023;
The inclusion of further safe harbor rules, including the simplified safe harbor calculations for non-material constituent entities, the QDMTT safe harbor provisions, and the UTPR safe harbor; and
The addition of rules for the allocation of taxes arising under a blended CFC tax regime in accordance with administrative guidance issued by the OECD in December 2023.
The measures apply from the same dates as the minimum tax law, which is generally for tax years commencing on or after 31 December 2023.
Italy
The Italian Ministry of Economy and Finance has announced the Decree of 20 May 2024 concerning the simplified transitional regimes (safe harbors) provided for multinational and national groups subject to the Pillar 2 global minimum tax rules. This includes regulations for the implementation of the transitional country-by-country reporting safe harbor and related anti-arbitrage guidance, as well as the transitional UTPR safe harbor. The provisions of the decree implement into domestic law the regimes agreed by the OECD BEPS Inclusive Framework as covered in the Safe Harbors and Penalty Relief document published in December 2022 and the administrative guidance published in July 2023 and December 2023.
Ireland
Irish Revenue has issued eBrief No. 136/24 on new guidance regarding the implementation of the Pillar 2 global minimum tax in accordance with Council Directive (EU) 2022/2523 of 15 December 2022.
Revenue eBrief No. 136/24 – Implementation of Council Directive (EU) 2022/2523 of 15 December 2022 on Ensuring a Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union
Section 94 of Finance (No.2) Act 2023, by inserting a new Part 4A of the Taxes Consolidation Act (TCA) 1997, implemented the Pillar Two minimum effective tax rate for large groups and companies by transposing the EU Minimum Tax Directive (Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union) (the ‘EU Minimum Tax Directive’) into Irish law.
Tax and Duty Manual – Part 4a-01-02 contains an overview of the main Pillar Two charging rules along with a detailed correlation table which cross references the legislation contained in Part 4A of the TCA 1997 with:
The relevant article of the EU Minimum Tax Directive,
The relevant article of the OECD Model Rules,
OECD Commentary, where relevant, and
OECD Administrative Guidance, where relevant.
Revenue is engaging with the Tax Administration Liaison Committee (TALC), specifically the TALC BEPS sub-committee, in respect of areas of guidance on the Pillar Two rules. This Tax and Duty manual will be expanded in due course to include further guidance on the Pillar Two rules contained in Part 4A of the TCA 1997.
UK:
UK HMRC has issued a notice on how to register for Pillar 2 top-up taxes in the UK, as well as basic guidance.
Pillar 2 top-up taxes registration (notice 1)
This notice explains how to register for Pillar 2 top-up taxes in the UK, the information required to complete a registration and how to notify HMRC of any reporting related changes made after registration.
1. Overview
There are two Pillar 2 top-up taxes in the UK:
- Domestic Top-up Tax
- Multinational Top-up Tax
Groups must register with HMRC within 6 months of the end of the first accounting period that started on or after 31 December 2023 which makes them subject to the rules.
Groups that have entities located in the UK and other jurisdictions must register to report for both Domestic Top-up Tax and Multinational Top-up Tax.
Groups that only have entities located in the UK must register to report for Domestic Top-up Tax.
This Notice explains what groups must do to register with HMRC.
1.2 Registration deadline
If your group meets the eligibility criteria, you must register using the online service within six months of the end date of the first accounting period in which the criteria were met.
1.3 Who needs to register
This section has force of law under Paragraph 6 of Schedule 14 to the Finance (No. 2) Act 2023
If you are a group or single entity who:
- has at least 1 entity located in the UK
- has made consolidated group annual revenues of €750 million or more within 2 of the last 4 accounting periods
Then you must use the online service to register and report for Pillar 2 top-up taxes in the UK.
Only the filing member for the group can use the online service. This will be the ultimate parent entity (UPE) by default, but the UPE can nominate another group entity as the filing member.
The filing member does not need to be UK resident. However, if the filing member is not UK resident HMRC will not be able to automatically exchange any Globe Information Return (GIR).
1.4 What you need to be able to register
This section has force of law under Paragraph 6 of Schedule 14 to the Finance (No. 2) Act 2023.
To register, the filing member will need to provide HMRC with:
- the name and registered address for the UPE
- the name and registered address for the filing member, if it is not the UPE
- if either of these are a UK limited company or limited liability partnership, you must also provide the company registration number (CRN) and Unique Taxpayer Reference (UTR)
- whether the group you are registering only has entities located in the UK, or in the UK and other jurisdictions
- the start and end date of the group’s accounting period
- contact details and preferences, for one or 2 individuals or teams in the group
- a contact postal address for the group
2. Notifying HMRC about a change to the group’s filing member
This section has force of law under paragraph 8 of Schedule 14 Finance (No. 2) Act 2023.
If the filing member of the group changes after the group has registered, the new filing member must use the online service to update the group’s filing member details. Groups have a legal requirement to replace their filing member’s details within 6 months of the change occurring.
2.1 Changes to registration details
This section has force of law under paragraph 9 of Schedule 14 Finance (No. 2) Act 2023.
The filing member must use the online service to update any of the details provided at registration, within 6 months of the change occurring.
Your rights and obligations
Read the HMRC Charter to find out what you can expect from us and what we expect from you.
Help us improve this notice
If you have any feedback about this notice, email: pillar2mailbox@hmrc.gov.uk.
You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT number.
Putting things right
If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.
If you’re still unhappy, find out how to complain to HMRC.
How HMRC uses your information
Find out how HMRC uses the information we hold about you.
Moldova
The OECD has announced that Moldova joined the Inclusive Framework on BEPS, bringing the total number of members to 147. As a member of the Framework, Moldova is committed to the implementation of the minimum BEPS standards, as well as the two-pillar solution to address the tax challenges arising from the digitalisation of the economy.
Fiji
The OECD has announced that Fiji joined the Inclusive Framework on BEPS, bringing the total number of members to 146. As a member of the Framework, Fiji is committed to the implementation of the minimum BEPS standards, as well as the two-pillar solution to address the tax challenges arising from the digitalisation of the economy.
