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 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.
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Gibraltar for accounting periods beginning on or after December 31, 2023 (for the domestic top up tax) and December 31, 2024 (for the IIR). Updated for the draft legislation issued on December 10, 2024.
On December 5, 2024, Decree No. 2024-1126 was published in the French Official Gazette. This provides additional details on the reporting requirements for Pillar 2 purposes.
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