On 17 June 2024, additional guidance and lists of qualifying and coverred jurisdictions under Amount B was released by the OECD. The additional guidance includes: The definitions of qualifying jurisdictions within the meaning of section 5.2 and 5.3 of the Amount B guidance. These definitions will facilitate adjustments to the return calculated under the simplified and streamlined approach for tested parties located in those qualifying jurisdictions. The respective definitions are now incorporated into the Amount B guidance in the annex to Chapter IV of the OECD Transfer Pricing Guidelines. The definition of covered jurisdictions within scope of the political commitment on Amount B. That political commitment recognises that subject to their domestic legislation and administrative practices, members of the Inclusive Framework commit to respect the outcome determined under the simplified and streamlined approach to in-scope transactions where such an approach is applied by a covered jurisdiction and to take all reasonable steps to relieve potential double taxation that may arise from the application of the simplified and streamlined approach by a covered jurisdiction where there is a bilateral tax treaty in effect between the relevant jurisdictions. The approach developed to produce the list of covered jurisdictions facilitates tax certainty for jurisdictions most interested in implementing Amount B from 1 January 2025. Note that an expression of interest in applying Amount B does not necessarily mean that a jurisdiction will proceed to implement it. Further work on the Pillar One package, including the Amount B framework, is still ongoing as indicated in the Statement by the Co-Chairs of the Inclusive Framework on 30 May 2024 ...

17 June 2024 OECD released a fourth set of Administrative Guidance on the Global AntiBase Erosion Model Rules (Pillar Two), in order to further clarify technical issues under the GloBE Rules. The Administrative Guidance will eventually be incorporated into the Commentary to the GloBE Model Rules. Administrative Guidance on the GloBE rules has also previously been release in July 2023, December 2023, and February 2024 ...

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 ...

The European Commission has proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinational groups. The proposal delivers on the EU’s pledge to move extremely swiftly and be among the first to implement the recent historic global tax reform agreement, which aims to bring fairness, transparency and stability to the international corporate tax framework. The proposed directive follows closely the international agreement and sets out how the principles of the 15% effective tax rate – agreed by 137 countries – will be applied in practice within the EU. It includes a common set of rules on how to calculate this effective tax rate, so that it is properly and consistently applied across the EU. The proposed rules 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 a low-taxed company is based, there are provisions for the Member State of the parent company to apply a “top-up” tax. The proposal 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. In line with the global agreement, the proposal also provides for certain exceptions. To reduce the impact on groups carrying out real economic activities, companies will be able to exclude an amount of income equal to 5% of the value of tangible assets and 5% of payroll. The rules also provide for an exclusion of minimal amounts of profit, to reduce the compliance burden in low risk situations. This means that when the average profit and revenues of a multinational group in a jurisdiction are below certain minimum thresholds, then that income is not taken into account in the calculation of the rate. Background Minimum corporate taxation is one of the two work streams of the global agreement – the other is the partial re-allocation of taxing rights (known as Pillar 1). This will adapt the international rules on how the taxation of corporate profits of the largest and most profitable multinationals is shared amongst countries, to reflect the changing nature of business models and the ability of companies to do business without a physical presence. The Commission will also make a proposal on the reallocation of taxing rights in 2022, once the technical aspects of the multilateral convention are agreed ...

The European Commission has proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinational groups. The proposal delivers on the EU’s pledge to move extremely swiftly and be among the first to implement the recent historic global tax reform agreement, which aims to bring fairness, transparency and stability to the international corporate tax framework. The proposed directive follows closely the international agreement and sets out how the principles of the 15% effective tax rate – agreed by 137 countries – will be applied in practice within the EU. It includes a common set of rules on how to calculate this effective tax rate, so that it is properly and consistently applied across the EU. The proposed rules 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 a low-taxed company is based, there are provisions for the Member State of the parent company to apply a “top-up” tax. The proposal 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. In line with the global agreement, the proposal also provides for certain exceptions. To reduce the impact on groups carrying out real economic activities, companies will be able to exclude an amount of income equal to 5% of the value of tangible assets and 5% of payroll. The rules also provide for an exclusion of minimal amounts of profit, to reduce the compliance burden in low risk situations. This means that when the average profit and revenues of a multinational group in a jurisdiction are below certain minimum thresholds, then that income is not taken into account in the calculation of the rate. Background Minimum corporate taxation is one of the two work streams of the global agreement – the other is the partial re-allocation of taxing rights (known as Pillar 1). This will adapt the international rules on how the taxation of corporate profits of the largest and most profitable multinationals is shared amongst countries, to reflect the changing nature of business models and the ability of companies to do business without a physical presence. The Commission will also make a proposal on the reallocation of taxing rights in 2022, once the technical aspects of the multilateral convention are agreed ...