Pillar II: First (potential) deadline can be met via FON Function

The Global Minimum Tax (Pillar II) also entails certain tax compliance obligations. Essentially, there is time until the year 2026 for this. However, there is one issue that may require action by December 31, 2024:

• Concentration of Tax Liability: In principle, all constituent entities that are part of a corporate group with more than EUR 750 million in consolidated revenue are affected by Pillar II. In Austria, however, only one constituent entity is regarded as the Pillar II taxpayer, regardless of whether it concerns the IIR, the UTPR or the QDMTT. The Pillar II taxpayer is the only constituent entity that is required to submit a preliminary declaration and pay any top-up tax. Be aware, though, that there are different rules for filing a GloBE Information Return.
• Determination of the Pillar II Taxpayer: If there are multiple Austrian constituent entities, the “top” constituent entity in Austria is automatically considered to be the Pillar II taxpayer; that is, the constituent entity that holds interests in all other constituent entities located in Austria and in which no other constituent entity located in Austria holds an interest. If there is no "top" constituent entity in Austria, the economically most significant constituent entity located in Austria is considered to be the Pillar II taxpayer.
• Appointment of a (Different) Pillar II Taxpayer: Alternatively, there is the possibility to deviate from this statutory regulation. For this purpose, the Ultimate Parent Entity (UPE) must appoint a constituent entity located in Austria to act as the Pillar II taxpayer.
• Proof by December 31, 2024: Proof that such an appointment has been made must be provided to the responsible tax office before the end of the preliminary declaration period. For fiscal years that coincide with the calendar year, the proof must therefore be provided by December 31, 2024. For fiscal years that deviate from the calendar year there is one more year to do so.
• FinanzOnline Function: Recently, an input mask was made available in FinanzOnline, through which such proof can be uploaded.

Corporate groups that wish to nominate a Pillar II taxpayer in Austria that is different from the constituent entity that would be the Pillar II taxpayer based on the general rule should ensure that the appointment is made and proven to the Austrian tax office in a timely manner (often by December 31, 2024). If the basic rule is not to be deviated from, there is currently no need for action in this regard.

If you are unsure whether you need to take action until end of this year, we gladly discuss your individual situation and provide advice on what to do.