Poland Withdraws its Veto and the EU Pillar Two Directive is Adopted

Last night the Council of the European Union formally adopted (among other things) the EU Pillar Two directive.

Poland pulled its veto at the last minute and all Member States (except for Hungary, which abstained from voting) voted in favor of the directive.

This is now where the real work begins and member states will have to transpose the directive into national law by the end of 2023. 

2024 will therefore see a flurry of legislation, regulations and administrative guidance issued throughout the EU. Use our Pillar Two Tracker to keep up to date with the latest developments. 

The OECD is also to issue the draft Pillar Two Return and details of Safe Harbours. 

In 2024, in-scope MNEs will therefore need to ensure they have implemented systems to correctly capture and process the data for Pillar Two reporting. 

The written procedure for the adoption of the EU Pillar Two directive includes a new article 55a in the directive and a statement by Sweden on its impact. This is an interesting development.