On 20 December 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, involving 137 countries, released Model Globe Rules under Pillar 2.  The document contains the rules for a Global Minimum Tax at 15% for Multi-national Enterprises with a turnover of more than €750 million.  It is anticipated that a document providing further commentary on the rules will be released early next year.  The model rules released on 20 December differ from the original Blueprint on Pillar 2 from October 2020 in significant ways.

The model rules have added a new concept of domestic top-up tax.  This allows a jurisdiction to introduce a rule, which effectively duplicates the model rules for top-up tax, but ensures that the tax is collected by that local jurisdiction and is not ceded to another jurisdiction under either the Income Inclusion Rule or the Under-Taxed Payments Rule.  Assuming low-tax jurisdictions take this path, it may reduce the complexity of the rules in many circumstances while achieving the goal of the Pillar 2 project of providing a floor for tax competition.

Also excluded from this Pillar 2 package are the proposals for a Subject to Tax Rule which is proposed to apply to certain payments including interest and royalties where the nominal tax rate on a payment falls below a minimum rate of 9%.  The final scope of these rules is yet to be determined and expected in early 2022.

A copy of the KPMG’s insights can be accessed via the above link.

Should you have any questions or require further clarification, please do not hesitate to email any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation.

Tai Lai Kok
Executive Director
Head of Tax
Nicholas Crist
Executive Director
Corporate Tax

Bob Kee
Executive Director
Head of Transfer Pricing

Petaling Jaya Office

Tai Lai Kok
Executive Director -
Head of Tax and Head of Corporate Tax
+ 603 7721 7020

Long Yen Ping
Executive Director -
Head of Global Mobility Services
+ 603 7721 7018

Bob Kee
Executive Director -
Head of Transfer Pricing
+ 603 7721 7029

Ng Sue Lynn
Executive Director -
Head of Indirect Tax
+ 603 7721 7271

Soh Lian Seng
Executive Director -
Head of Tax Dispute Resolution
+ 603 7721 7019


Outstation Offices

Penang Office

Kuching & Miri Office

Evelyn Lee
Executive Director -
Penang Tax
+604 238 2288 (ext. 312)

Regina Lau
Executive Director -
Kuching & Miri Tax
+6082 268 308 (ext. 2188)

Kota Kinabalu Office

Johor Bahru Office

Titus Tseu
Executive Director -
Kota Kinabalu Tax
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director -
Johor Bahru Tax
+607 266 2213 (ext. 2514)

Ipoh Office


Crystal Chuah Yoke Chin
Tax Manager -
Ipoh Tax
+605 253 1188 (ext. 320)