Global Minimum Tax
In Today’s 2023 Budget, Hong Kong’s Financial Secretary confirmed that Hong Kong will implement the Pillar Two Global Minimum Tax from 2025.
They estimate that it will generate tax revenue of $15 billion per year for the Government. A consultation is to be launched to allow MNE groups to make early preparation.
It was also announced that Hong Kong will be introducing a Patent Box.
Given the significant foreign direct investment (FDI) into Hong Kong (in 2021 FDI inflows into Hong Kong were US$140.7 billion, the 3rd highest globally behind the United States and Mainland China), it is expected that there will be other ancillary adjustments over the next 2 years to the domestic tax regime to ensure Hong Kong remains internationally competitive after the GloBE rules are introduced.
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On December 24, 2024, South Africa published the Global Minimum Tax Act in its Official Gazette. This applies an IIR and QDMTT from January 1, 2024.
On December 23, 2024, Australia issued the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 to provide for the detailed application of the Pillar 2 GloBE rules in Australia.
On December 19, 2024, Luxembourg’s Parliament approved a law to amend its Global Minimum Tax Law to implement aspects of the OECD Administrative Guidance.
The Isle of Man has issued a domestic top up tax cessation form for entities that are located in the Isle of Man that are intending to enter liquidation, dissolution or any other form of winding up, or otherwise cease to be located in the Isle of Man for DTUT purposes
On December 13, 2024, the Tax Laws (Amendment) Act, 2024 was published in the Official Gazette. It comes into force on December 27, 2024 and includes a domestic minimum top-up tax.
On December 17, 2024, the Dutch Parliament approved a draft law to amend the GMT Law. This includes a number of amendments to implement further aspects of the February 2023 and July 2023 OECD Administrative Guidance and some aspects of the December 2023 OECD Administrative Guidance.
On December 17, 2024, the Chamber of Deputies approved Bill 3817/24 that repeats Provisional Measure No. 1,262/2024 and implements the DMT. It will be sent to the Senate.
In December 2024, the Malaysian Inland Revenue Board (MIRB) issued guidance on the interpretation and administration of the Pillar Two global minimum tax applicable from January 1, 2025.
On 12 December 2024, the Cyprus House of Representatives voted to approve local legislation to implement Pillar 2. The Law will come into effect once it is published in the official Government Gazette.
On December 15, 2024, Bahrain issued Decision no. (172) of 2024 to provide for the Executive Regulations for the DMTT law. This provides the detailed rules for the operation of the DMTT.
On December 10, 2024, the Australian GloBE legislation received Royal Assent.
On December 10, 2024, Gibraltar issued the Global Minimum Tax Bill 2024 to transpose the OECD Model Rules (and accompanying guidance) into domestic law.
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