A Review of the Polish Draft Law to Implement the Pillar Two GloBE Rules
On April 25, 2024, the Polish Ministry of Finance issued a draft law to implement the EU Minimum Tax Directive into domestic law. Read our review of the draft law.
Contents
General
On March 20, 2023, the German Federal Ministry of Finance published a consultation, including a draft law (the Minimum Taxation Directive Implementation Act), to implement the EU Global Minimum Tax Directive. The consultation is open for comments until April 21, 2023.
The draft legislation is very comprehensive and, as expected, covers all relevant aspects of the EU Global Minimum Tax Directive.
In particular, it provides for an Income Inclusion Rule (IIR) for financial years beginning after December 30, 2023 and the Under-Taxed Payments Rule (UTPR) for financial years beginning after December 30, 2024.
The draft legislation also includes a Qualifying Domestic Minimum Top-Up Tax (for financial years beginning after December 30, 2023) which reflects the latest design guidance in the OECD Administrative Guidance.
In addition, safe harbours, as reflected in the OECD Safe Harbour Guidance are also reflected in the draft legislation.
The structure of the legislation is:
Part 1: General Provisions/Definitions
Part 2: IIR/UTPR
Part 3: Determination of GloBE Income or Loss
Part 4: Determination of adjusted taxes
Part 5: Determination of the effective tax rate and the top-up tax
Part 6: Business restructuring and shareholding structures
Part 7: Special features of ultimate parent companies, distribution regimes and investment units
Part 8: Administration
Part 9: Special provisions for the transitional year, the transitional period and the initial phase
Part 10: Qualified domestic minimum top-up tax (QDMTT)
Part 11: Procedures and Penalties
This layout is pretty much identical to the EU Minimum Tax Directive, with the addition of two new chapters for the QDMTT and procedures and penalties.
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On April 25, 2024, the Polish Ministry of Finance issued a draft law to implement the EU Minimum Tax Directive into domestic law. Read our review of the draft law.
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Poland on or after January 1, 2025. Updated for the draft legislation issued by the Polish Ministry of Finance on April 25, 2024.
The tax data mapping assessment is the cornerstone for MNEs looking to implement an effective approach to manage Pillar Two. All systems changes flow from this.
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Barbados for accounting periods beginning on or after January 1, 2024. Updated for the draft legislation being considered by the Barbadian Parliament.
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On March 22, 2024, the Decree of the Ministry of Economy and Finance No. 1048, to amend the Enforcement Regulations of the International Tax Adjustment Act entered into force.
On March 22, 2024, the Enforcement Regulations to the International Tax Adjustment Act were amended. This includes attachments for the GIR (in English and Korean), the GloBE Tax Return and the Notification Form for a Foreign CE to File the GIR.
Whilst the OECD Model Rules require the application of the IIR to Low-Taxed Constituent Entities outside the jurisdiction, the Commentary permits the application of the IIR domestically (a ‘DIIR’). Both New Zealand and the EU apply a DIIR.
Analysis of the Pillar Two GloBE rules in Greece – updated for Law 5100/2024 of April 5, 2024 implementing the EU Minimum tax Directive.
On April 5, 2024, Law 5100/2024 was published in the Official Gazette. This implements the EU Minimum Tax Directive in Greece from December 31, 2023 (with the UTPR applying from December 31, 2024).
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Liechtenstein from 2024. Updated for the GloBE Regulation of March 28, 2024.
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