Tax Updates: December 13th, 2022
Consistent with our commitment to provide updated information on current tax issues
Consistent with our commitment to provide updated information on current tax issues
Member States of the EU reached agreement to adopt the EU Minimum Tax Directive
Last night the Council of the EU announced that the ambassadors of EU member states reached unanimous agreement to adopt the EU Minimum Tax Directive (or Pillar Two Directive), which actually implements the minimum tax component, known as Pillar 2, of the OECD’s reform of international taxation. The text of the Directive to be adopted is the version published on November 25 of this year and a written procedure for the formal adoption is to be launched and expected to be completed by the end of Wednesday, December 14. The EU Minimum Tax Directive must be transposed into member states’ national law by the end of 2023, thus resulting in the EU being a front-runner in applying the G20/OECD global agreement on Pillar Two.
Effective implementation of the Directive is expected to limit the “race to the bottom” in corporate tax rates and reduce the risk of tax base erosion and profit shifting by ensuring that the largest multinational groups pay the agreed global minimum rate of corporate tax (agreed at 15%).
