12 December 2022 the EU Council announced unanimous agreement among member states on the Commission’s proposal for a Directive ensuring a minimum effective tax rate of 15% for large multinationals with a turnover of at least €750 million.
With the agreement, the EU will be among the first to implement Pillar II.
The Council Directive includes a common set of rules on how to calculate the 15% effective minimum tax rate– so that this is properly and consistently applied across the EU.
The rules will apply to multinational enterprise groups and large-scale domestic groups in the EU, with combined financial revenues of more than €750 million a year. They will apply to any large group, both domestic and international, with a parent company or a subsidiary situated in an EU Member State. If the minimum effective rate is not imposed by the country where the subsidiary company is based, there are provisions for the Member State of the parent company to apply a “top-up†tax. This Directive also ensures effective taxation in situations where the parent company is situated outside the EU in a low-tax country which does not apply equivalent rules.