The ambassadors of EU member states reached a preliminary agreement on Dec. 12 to implement the global minimum tax under the Pillar 2 framework from the Organisation for Economic Cooperation and Development (OECD).
Pillar 2 seeks to impose a 15% minimum tax on the earnings of certain multinational groups with revenues of 750 million euros or more. For additional information on Pillar 2, see our prior story, “Key updates on the global implementation of Pillar 2.”
The deal required unanimous agreement and represents a major breakthrough toward implementation and overcoming objections from resistant countries like Hungary and Poland. There are still hurdles ahead, however. The agreement among ambassadors of EU member states in the Committee of Permanent Representatives is to advise the EU Council to adopt the Pillar 2 directive.
As a next step, the EU Council is expected to formally adopt Pillar 2 in a written procedure. Once it is formally adopted at the EU level, the directive will then need to be transposed into member states’ national laws by the end of 2023. However, due to the delay in the implementation of Pillar 2 around the world, it remains to be seen whether there will be widespread implementation of key provisions by the 2023 timeline set by the OECD. For more details regarding the delay, please refer to our previous story, “Key jurisdictions delay implementation of Pillar 2”.
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