On November 7, 2024, the Finance Bill 2024-2025 was introduced to Parliament. This includes provisions to enact the UTPR (and associated rules such as the Transitional UTPR Safe Harbour and Initial Phase of International Activity Exemption), and other Pillar 2 amendments.
We keep track of the domestic implementation of the Subject-to-Tax Rule (STTR) internationally including links to relevant effected double tax treaties.
MNE groups should pay careful attention to any group financing companies in light of the Pillar Two Rules. In this analysis we look at the impact of Pillar Two for both general GloBE and QDMTT purposes.
The Pillar Two effective tax rate (ETR) calculation for investment entities is similar to the standard ETR calculation, however, there is an important twist in that the top-up tax is adjusted for minority interests. There is no adjustment for minority interests under the standard ETR calculation. In this article we look at the impact of this.
Top-up taxes under a QDMTT are added to covered taxes of a CFC but only for the purposes of calculating the allocation of Blended CFC Taxes. The way the rules operate is aimed at minimising unrelievable CFC taxes under Blended CFC Regimes. Read more.
The substance-based income exclusion favours capital intensive and certain low profit margin companies. These companies stand to benefit the most.
Whilst the treatment of investment property for financial accounting purposes is important when determining the GloBE treatment, of even more importance are any differences between the financial accounting treatment and the domestic tax treatment.
The clarifications and additions to the Commentary to the Pillar Two GloBE Rules provided by the OECDs Administrative and Safe Harbours Guidance, means that there are now up to four jurisdictional effective tax rates (ETRs) that may need to be calculated to determine the impact of the GloBE Rules.
Permanent Establishments (PEs) are subject to a number of specific rules under Pillar Two in order to apply the general provisions to them. Key issues are what is a PE under Pillar Two? where is it located? and how are income and taxes allocated to it?
On July 3, 2024, the Italian Ministry of Economy & Finance issued a Decree which contains the procedures for the implementation of the Qualified Domestic Minimum Top-up Tax (QDMTT).
This website is not affiliated with or related to the OECD. We provide independent insights and analysis on the OECD Two-Pillar Solution
© 2024 OECDPillars
All Rights Reserved
