Status of Pillar Two Implementation in the EU as at March 1, 2024

The EU Minimum Tax Directive required EU member states to enact laws, regulations and administrative provisions necessary to comply with the EU Pillar Two Directive by December 31, 2023.

In particular, it required member states to implement an Income Inclusion Rule (IIR) for fiscal years beginning from December 31, 2023 and an Under-Taxed Profits Rule (UTPR) for fiscal years beginning from December 31, 2024. The exception to this is where a member states elects for a delayed application of the IIR and UTPR in accordance with Article 50 of the EU Minimum Tax Directive.

Whilst many EU jurisdictions have enacted legislation to implement the EU Minimum Tax Directive (see our Domestic Legislation analysis) there are still a number that have not. This includes:

– Lithuania

– Latvia

– Malta

– Estonia

– Cyprus

– Greece

– Spain

– Portugal

– Poland

On January 24, 2024, the EU Commission announced infringement decisions against these EU member states as they have not transposed the EU Minimum Tax Directive into domestic law.

Since the EU infringement decision a number of these jurisdictions have issued draft legislation (or announced they intended to). 

In this article, we look at the status of implementation of the GloBE rules in these jurisdictions as at March 1, 2024.