Italy: Pillar Two global minimum tax rules implemented

Legislative decree n. 209 implemented the EU Minimum Tax Directive in Italy effective 1 January 2024.

Pillar Two global minimum tax rules implemented

Legislative decree n. 209 (dated 27 December 2023 and published in the Official Journal of 28 December 2023) implemented the EU Minimum Tax Directive (Council Directive (EU) 2022/2523 of 14 December 2022) in Italy effective 1 January 2024.

The legislation provides for:

  • National minimum tax (“Qualified Domestic Minimum Top-Up Tax” or QDMTT) to be applied to Italian entities belonging to large groups (multinational and national) with an effective tax rate (ETR) of less than 15%
  • Minimum supplementary tax (“Income Inclusion Rule” or IIR) payable by the parent companies with respect to low-tax companies not located in Italy (including stateless entities)
  • Additional minimum tax (“Undertaxed Profits Rule” or UTPR) payable by one or more companies of a multinational group located in Italy in relation to companies belonging to the group present in other jurisdictions subject to low taxation when it has not been applied, in whole or in part, and by parent companies in other countries

All companies located in Italy are jointly and severally liable for QDMTT, but the group may identify the company responsible for paying the tax. In addition, a de minimis exclusion (under which the top up tax is presumed to be zero) is provided for multinational or national group companies located in a jurisdiction when their aggregate revenues and incomes are less than €10 million and €1 million, respectively, on average over a three-year period.

Further transitional simplification regimes also apply in the first three years of validity of the rules (tax periods 2024, 2025 and 2026), and the rules also incorporate the OECD’s transitional country-by-country (CbC) reporting safe harbor.

Read a January 2024 report in Italian or English [PDF 276 KB] prepared by the KPMG member firm in Italy 


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