See Pillar Two developments by country

The OECD on 15 January released additional Pillar Two Administrative Guidance on the GloBE Model Rules and several related documents aimed at streamlining the administration of the global minimum tax. This includes guidance on transition rules on deferred tax assets (Article 9.1 Model Rules), a list of countries that have (temporary) ‘qualified’ Pillar Two rules, an updated GIR and related Commentary, an updated XML Schema, and a Multilateral Competent Authority Agreement (MCAA) to facilitate central filing and exchange of the GIR.

On 10 July 2024, the OECD published its invitation to comment on a draft User Guide for the GloBE Information Return XML Schema, a tool created to facilitate domestic GIR filings, wherever appropriate, and to be the technical format for exchanging GIR information between tax administrations. The deadline to send comments is 19 August 2024.

On 17 June 2024, the OECD/G20 Inclusive Framework on BEPS published the fourth set of Administrative Guidance on the GloBE rules of Pillar Two, intending to clarify the operation of the GloBE rules. This package of guidance sheds light on some areas where businesses and tax authorities have previously sought clarification and simplification: deferred tax liability recapture, divergences between GloBE and accounting carrying values, allocation of cross-border current taxes, allocation of cross-border deferred taxes, allocation of profits and taxes in structures including flow-through entities, and treatment of securitisation vehicles.

On 25 April 2024, a Consolidated Commentary, which incorporates Agreed Administrative Guidance that has been released by the Inclusive Framework since March 2022 up until December 2023, was released. The guidance issued on 17 June 2024 will also be incorporated to this Consolidated Commentary.

On 3 October 2023, the G20/OECD Inclusive Framework on BEPS (IF) opened for signature by states, without reservations, a multilateral instrument (MLI) to implement the Pillar Two Subject to Tax Rule (STTR). It was accompanied by an explanatory statement, high-level summary, and frequently asked questions.

On 12 July 2023, the OECD published a press release and “Outcome Statement” following the 15th plenary meeting of the IF, which took place in Paris on 10-11 July, and on 17 July a package of documents that included: • agreed text for the Pillar Two STTR; • the contents required in the Pillar Two GloBE Information Return; and • further Pillar Two GloBE Administrative Guidance. The Outcome Statement was approved by 138 of the 143 IF members (Belarus, Canada, Pakistan, the Russian Federation, and Sri Lanka did not sign, but Kenya and Nigeria did).

On 20 December 2022, the OECD published the first three guidance papers to form part of the implementation framework:

• Guidance on Safe Harbours and Penalty Relief, approved by the IF on 15 December;
• A public consultation document on the GloBE Information Return (OECD Secretariat consultation document and, thus, unagreed by the IF); and
• A public consultation document on Tax Certainty for the GloBE Rules (OECD Secretariat consultation document and, thus, unagreed by the IF).

A Commentary to the GloBE rules agreed by the IF, together with OECD illustrative examples, were published on 14 March 2022.

In October 2021, over 135 jurisdictions had agreed to update the international tax system on the basis that it was was no longer fit for purpose in a globalised and digitalised economy. The GloBE Model Rules agreed by the IF were published on 20 December 2021. The means by which GloBE must be incorporated into domestic law is determined by each implementing jurisdiction.

EU Member States reached a political agreement during their 11 March 2025 ECOFIN meeting on DAC9 – the Directive on administrative cooperation in taxation. DAC9 was introduced in October 2024 to facilitate the exchange of Pillar Two top-up tax information between Member States and allow MNEs to only have to file one top-up tax information return, at the central level, for the entire group. The proposal also transposes the OECD’s July 2023 GloBE Information Return (GIR) into EU law by making it the Top-up Tax Information Return (TTIR) as already contemplated by Article 44 of the EU global minimum tax Directive.

The Directive entered into force on 23 December 2022, the day following its publication in the Official Journal of the European Union. Member States shall transpose the Directive into their domestic law by 31 December 2023. The EU Council formally adopted the EU minimum tax Directive by written procedure on 15 December, ending the written procedure with this unanimous agreement notwithstanding the fact that Hungary abstained from the final vote and Sweden made a written observation on a specific provision of the Directive.

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Australia’s Pillar Two legislation to implement the Global and Domestic Minimum Tax was passed into law in December 2024, incorporating the following:  

• Taxation (Multinational – Global and Domestic Minimum Tax) Imposition Act 2024 (Imposition Act); 
• Taxation (Multinational – Global and Domestic Minimum Tax) Act 2024 (Assessment Act); and 
• Treasury Laws Amendment (Multinational – Global and Domestic Minimum Tax) (Consequential) Act 2024 (Consequential Amendments Act). 

These Pillar Two Acts, together with the subordinate legislation - Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 (the Rules) which was registered as an instrument on 23 December 2024 - form the package of legislation which implements the IIR, UTPR and DMT in Australia. 

The IIR and DMT apply in Australia to in scope MNE Groups for Fiscal Years commencing on or after 1 January 2024. The UTPR will apply for Fiscal Years commencing on or after 1 January 2025.

On 11 July 2024, Austria's Federal Council approved the Tax Amendment Act 2024, following its approval by the National Council. The Tax Amendment Act 2024 amends Austria’s Minimum Taxation Reform Act to incorporate the OECD’s December 2023 Administrative Guidance on the Pillar Two temporary safe harbor rules.

The Austrian Pillar Two legislation was enacted in December 2023 and published in the Austrian Official Gazette on 30 December 2023. The transposition of the EU minimum tax Directive in Austria is through a separate law which foresees the implementation of an IIR (for fiscal years starting on or after 31 December 2023), a UTPR (for fiscal years starting on or after 31 December 2024) and a QDMTT (for fiscal years starting on or after 31 December 2023).

On 24 November 2023 the Austrian Pillar Two draft legislation was submitted to the Austrian parliament. The draft legislation largley followed the consultation draft. However, some details and clarifications in the provisions and the explanatory notes were not included. On 3 October 2023 the Austrian Ministry of Finance (BMF) published a consultation draft for an act to ensure a global minimum tax of 15% for MNE and large-scale domestic groups (Pillar Two). It largely followed the EU minimum tax Directive, the OECD model rules as well as further publications of the OECD (e.g. Administrative Guidance and Safe Harbour Rules).

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The Domestic Minimum Top-Up Tax Act, 2024 was enacted in November 2024.

Bahrain has published Decree Law (11) of 2024, which introduces a Domestic Minimum Top-Up tax (DMTT) for MNEs, (hereinafter referred to as the “DMTT Law”). The DMTT Law provides the legislative basis for the introduction and implementation of a DMTT in Bahrain, and it is intended to be consistent with the OECD GloBE Model Rules. The DMTT Law will only apply to MNEs with global consolidated revenues in excess of EUR 750m. The rules under the Decree, will apply from January 1, 2025, and seek to ensure that MNEs are subject to a minimum of 15% ETR on profits earned in Bahrain. The DMTT Law mainly lays out the framework of the rules, however further details are expected in the executive regulations and decisions to the DMTT Law (“Regulations”), which will be released in due course upon approval by the Bahrain Cabinet.

With the DMTT Law, Bahrain is the first GCC country to announce the introduction of the Pillar Two rules.

The Corporation Top-up Tax (Amendment) Act, 2024 is in force and effective from fiscal years commencing on or after 1 January, 2024

On 14 December 2023, Belgium approved the final law introducing a minimum tax for multinational companies and large domestic groups. This is the Belgian transposition of Council Directive (EU) 2022/2523 of 15 December 2022 ensuring a global minimum level of taxation for groups of multinational enterprises and large domestic groups in the European Union. The text was also published in the Belgisch Staatsblad/Moniteur Belge on 28 December 2023 so that the law entered into force on 31 December 2023.

Bermuda published the Corporate Income Tax Act in its Official Gazette, which imposes a corporate income tax starting 1 January 2025 on certain Bermuda entities part of large MNE groups. As per the Government of Bermuda, "the introduction of the Corporate Income Tax will only apply to large multinational corporations and fulfills Bermuda's commitment to participate in the Global Minimum Tax initiative being implemented around the world." On 31 January 2025, the Ministry of Finance opened a second public consultation on the amended administrative provisions regarding the Corporate Income Tax Act 2023, which include enforcement measures and penalties. Interested parties should respond by February 21

On 8 August 2023, the Government of Bermuda issued a public consultation paper as part of its considerations on introducing a corporate income tax to apply to Bermuda businesses that are part of Multinational Enterprise Groups (MNEs) with annual revenue of €750M or more. To allow interested parties to offer comments on the proposed tax regime, the Government of Bermuda opened a series of consultation periods.

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On December 30, 2024, Ley 15,079 was published without vetoes, resulting from Bill (PL) 3,817/2024. Even though it is not exactly the law converting Provisional Measure (MP) 1,262, published on October 3, 2024, the initial text of the PL, as already explained, replicated the terms of the MP. Thus, Law 15,079, in relation to the majority of its articles, remained in force from January 1, 2025, under the terms of article 43 (certainly assuming that no legislative decree was issued).

The Brazilian Congress approved draft law 3817/24 on 17 December 2024 (the draft law establishes the CSLL in the process of adapting Brazilian legislation to the Pillar Two rules ).

In January 2023, BVI Finance held a webinar with a panel of experts to discuss the implications of Pillar Two with delegates present including BVI Finance members, private sector practitioners and representatives from some of the world’s leading financial services firms. The BVI International Tax Authority representative stated that the BVI have to take a pragmatic approach on what the BVI decides to do and how it will work and that it would be a big administrative burden to implement a 15% tax. He also stated that the BVI will continue to work directly with the OECD to see how it might affect the jurisdiction. The BVI Government continues to put resources into the International Tax Authority to ensure that they are able to follow the ever-changing landscape in taxation. On 15 August 2023 the BVI Deputy Premier mentioned that they are watching Pillar Two situation very closely and that BVI has always “adhered to all of the international requirements”, being the global minimum tax “no different”.

The EU global minimum tax Directive was transposed into the Bulgarian Corporate Income Tax Act (on 12 December 2023 Bulgaria’s National Assembly passed amendments to the Corporate Income Tax Act, allowing the country to transpose the EU minimum tax Directive into national law). The amendment to the CIT Act was promulgated in the State Gazette, in force as of 1 January 2024.

In the beginning of December 2024, a draft bill with some amendments to the Pillar Two legislation has been submitted to Parliament, currently pending the required legislative process and voting. The proposed changes are mainly to reflect aspects of the OECD’s Administrative Guidance.

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Canada's legislation to implement Pillar Two (the Global Minimum Tax Act) was enacted on June 20, 2024. Explanatory Notes for this legislation were released on May 31, 2024.

The legislation includes an IIR, and a QDMTT that will apply to Canadian entities of MNE groups that are within the scope of Pillar Two. The IIR and the QDMTT are in effect for fiscal years of MNE groups that begin on or after 31 December 2023. The currently enacted legislation does not include a UTPR. On 12 August 2024, Canada released legislative proposals to amend the Global Minimum Tax Act; these proposals include a UTPR. The UTPR will come into effect for fiscal years of MNE groups that begin on or after 31 December 2024.

For these purposes, an MNE group is considered to have the same fiscal year as its Ultimate Parent Entity.

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The Colombian Executive Branch enacted Law 2277 on 13 December 2022, which becomes effective 1 January 2023. The law includes a tax reform and, among other measures, a 15% Minimum Effective Tax Rate that applies to Colombian-resident corporations (with a few industry-specific exceptions) was introduced. This new requirement reflects the rate proposed by the OECD's Pillar Two initiative, but when viewed in conjunction with other Tax Reform Law changes appears to have different and, sometimes, broader goals.

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Croatian Law on minimum Global Corporate Income Tax (the "Law") came into force as of 31 December 2023. The Law will apply to the fiscal years commencing after 31 December 2023.

The Croatian Pillar Two rules are in line with the Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union.

On December 18, 2024, the Global Minimum Tax of MNE Groups and Large-Scale Domestic Groups Law was published in the Cyprus Government Gazette (completing in this way the legislative process), transposing into Cyprus national law the relevant EU Directive issued on December 14, 2022, on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups.

The Law provides that the main rule named as the Qualified Income Inclusion Rule is practically effective as from 2024, the secondary rule named as the Qualified Undertaxed Profits Rule is practically effective as from 2025, and the Cyprus domestic minimum top-up tax also practically effective as from 2025.

The adoption of the Law does not modify Cyprus’ corporate income tax legislation; rather the Law introduces an additional tax legislation which is only to be applied in parallel to the corporate income tax legislation for the groups within scope.

Czech legislation on Pillar Two came into effect on 31 December 2023. Czech law implements the GloBE rules, i.e. the IIR rules (effective from 31 December 2023) and the UTPR rules (effective from 31 December 2024), Transitional CbCR and UTPR Safe Harbours and QDMTT Safe Harbour. The Czech Republic also implemented the Domestic Minimum Top-up Tax for Czech entities.

Currently, proposed amendments to the Pillar Two law, introducing significant changes, are in the legislative process with an anticipated retroactive effect from January 1, 2024. However, it is unclear whether / when the amendments will be approved.

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The final Danish bill was adopted by the Danish Parliament on 7 December 2023. The Minimum Tax Act is the Danish implementation of the Council Directive (EU) 2022/2523 of 14 December 2022 into Danish internal law with effect as from 1 January 2024.

On 4 June 2024, the Danish Parliament adopted a legislative proposal to amend the Minimum Tax Act with the main purpose of aligning the Danish legislation with the OECD Administrative Guidance from December 2023, as well as fixing unintended inconsistencies in the Danish legislation.

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The Estonian government approved a draft bill amending the law which implements Article 50 of the EU minimum tax Directive (which permits Estonia to defer applying the IIR and UTPR until 1 January 2030). The bill was submitted to the Estonian Parliament, which passed it on 10 April 2024.

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The Finnish Pillar Two Law came into force on 1 January 2024, and implements the Income Inclusion rule (IIR), the Undertaxed Profits Rule (UTPR) and the Qualified Domestic Minimum Top-up Tax (QDMTT). The IIR and QDMTT rules are applied for financial years starting on or after 31 December 2023, and the UTPR for financial years starting on or after 31 December 2024.

The Pillar Two law closely follows the EU Directive and the GloBE Model Rules. Further, the central role of the OECD’s (existing and future) guidance is clearly acknowledged in the government proposal as a key to ensure harmonious implementation globally and to avoid differing interpretations across jurisdictions.

The government proposal for amending the Finnish Pillar Two legislation was accepted in 2024. The amendments complement the existing Finnish Pillar Two law, taking into account the OECD’s administrative guidance published in February, July, and December 2023.

The Finnish constitution requires that a tax law should include sufficient level of details to allow taxpayers to calculate their tax liability and leave little room for interpretation. These constitutional restrictions may restrict application of specific rules created or materially changed in the OECD's guidance if those rules or changes are not incorporated into Finnish legislation.

Article 33 of the the Finance Act for 2024 (n° 2023-1322 dated on 29 December 2023) transposed the EU minimum tax Directive into the French Tax Code.

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On 15 December 2023, the German Federal Council ("Bundesrat") approved the law to implement the EU Minimum Tax Directive. The law intered into force on 27 December 2023 and is to be applicable for the first time for fiscal years beginning after 30 December 2023. On 10 November 2023, the German Federal parliament ("Bundestag") had approved the law to implement the EU Minimum Tax Directive.

The German Ministry of Finance (MoF) had published a draft law on 20 March 2023 to implement the EU Minimum Tax Directive. The draft law was largely based on the EU Directive, the OECD Model Rules and other OECD publications (e.g., Safe Harbour Rules). The MoF requested to submit comments on the discussion draft by 21 April 2023. On 10 July 2023 the MoF had published an updated draft law. The new draft law included most of the OECD Administrative Guidance from February 2023. The MoF requested to submit comments on the draft law by 21 July 2023. On 17 August 2023 the Federal Goverment of Germany had published an updated draft law. The new draft law included additional, but not all guidance of the OECD Administrative Guidance from February 2023.

On 18 December 2024 the Gibraltar Government enacted the Global Minimum Tax Act 2024.

The Act imposes a Global Minimum Tax including a Domestic Minimum Top Up Tax compliant with the Organisation for Economic Co-Operation and Development (OECD) objectives by direct reference to their Global Anti-Base Erosion Model Rules (Model Rules) and Commentary and for connected purposes.

Law number 5100/2024 adopted by the Greek Parliament incorporated into the Greek legislation the EU Council Directive 2022/2523 on ensuring a global minimum level of taxation for multinational groups and large-scale domestic groups in the Union

There are no immediate plans to adopt Pillar Two rules in Greenland due to its complexibility. The local implementation in the future will depend on the progress and developments by different territories

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In December 2024, Guernsey passed legislation to implement the OECD’s Pillar Two rules, which is effective from 1 January 2025 but it awaits Royal Assent. No local guidance notes have been released as yet. Guernsey has implemented the Qualified Domestic Top-up Tax (DTT) and the Multinational Top-up Tax (MTT) for the Qualified Income Inclusion Rule, following the GloBE Model Rules with some modifications.

On 19 May 2023 the governments of Guernsey, Jersey and the Isle of Man published a joint statement regarding their approach to the OECD’s Pillar Two framework. Their intention is that this approach will comprise the implementation of an IIR and a domestic minimum tax from 2025. As per the Joint Statement, the three Crown Dependencies will continue to work together, monitoring implementation internationally and adapt accordingly to developments which may require adjustments to their own implementation plans.

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In progress - the Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Bill 2024 (“Bill”) was gazetted on 27 December 2024 to implement the GloBE rules, which comprises the income inclusion rule (“IIR”) and undertaxed profits rule (“UTPR”), as well as the Hong Kong minimum top-up tax (“HKMTT”).

The bill was introduced into the Legislative Council for first reading on 8 January 2025. Subject to the passage of the Bill, IIR and HKMTT will apply to a fiscal year beginning on or after 1 January 2025, while the UTPR will take effect from a date to be specified by notice published in the Gazette.

On 5 December 2023 Hungary enacted the EU global minimum tax Directive into Hungarian law, with Act LXXXIV of 2023 being published in the Hungarian Gazette. The Hungarian legislation became effective and is applying for financial years starting on or later than 31 December 2023. The draft law to transpose the EU minimum tax Directive was published on 18 October 2023 for public consultation.

The Icelandic Ministry of Finance and Economic Affairs released a fiscal Strategy Plan for 2025-2029 where it is stated that the implementation of Pillar Two rules is underway. Furthermore, it is stated that Iceland agreed to implement a global minimum tax and will complete the implementation in the second half of this year with a formal entry into force in 2025.

The Ministry of Finance and Economic Affairs published on 28 August 2024 a consultation document signaling the government’s intent to transpose Council Directive (EU) 2022/2523 into national law. Iceland wants to implement an IIR and a qualified domestic minimum top-up tax and was aiming to introduce legislation to Parliament this fall. According to the consultation document, internal consultations took place and entities potentially affected by the rules were already aware of their content. Furthermore, the Icelandic Ministry of Finance and Economic Affairs stated that public consultations were planned through the government's consultation portal to gather broader feedback from various stakeholders, including businesses, industry groups, and possibly the general public. The proposal will be translated into Icelandic and was expected to be enacted in the fall of 2024. It was also stated that the rules will be incorporated into Icelandic law with minimal deviations from the OECD IF guidelines. Regarding implementation and monitoring The Icelandic tax authority will set up systems to collect information from affected corporations and monitor compliance with the new rules.

No mention about Pillar Two in the announcement of the Union Budget 2025 on 1 February 2025.

In January 2025, the Indonesian Ministry of Finance published the Regulation No. 136/2024 regarding the implementation of Pillar Two (subject "Imposition of Global Minimum Tax based on International Agreement"). The regulation was dated 31 December 2024 with effective date 1 January 2025 (IIR and QDMTT to apply starting 1 January 2025 where the UTPR applies one year after).

The Pillar Two rules have been enacted in Ireland as of 18th December 2023, and take effect for in-scope businesses with accounting periods beginning on or after 31 December 2023.

The draft Pillar Two legislation closely follows the EU minimum tax Directive and the OECD Guidance released to date. Key measures included are: The adoption of a domestic minimum top-up tax (i.e., a QDTT) and an IIR that would apply to businesses with financial years starting on or after 31 December 2023, and a UTPR that would apply to financial years starting on or after 31 December 2024. Safe harbours included in the draft law include the Transitional CbCR Safe Harbour, Transitional UTPR Safe Harbour, QDMTT Safe Harbour and the Simplified Reporting Safe Harbour. The Irish rules also give legal effect to the OECD agreed administrative guidance as released, up to and including the June 2024 package.

On 21 November 2024 the Pillar Two law was passed.

On 19 May 2023 the governments of Guernsey, Jersey and the Isle of Man published a joint statement regarding their approach to the OECD’s Pillar Two framework. Their intention is that this approach will comprise the implementation of an IIR and a domestic minimum tax from 2025. As per the Joint Statement, the three Crown Dependencies will continue to work together, monitoring implementation internationally and adapt accordingly to developments which may require adjustments to their own implementation plans.

The Isle of Man Treasury Department presented the 2023-24 budget speech on 21 February 2023, which includes the following statement "The Assessor has been and continues to closely monitor the ongoing work of the OECD and the EU, particularly in respect of what is commonly referred to as the pillars… the Assessor already has work underway, considering the effect of the pillars on the Isle of Man, engaging with the relatively small number of companies on the Island that are likely to be most affected by the changes and liaising with counterparts in the Channel Islands". It concluded with reference to significant decisions on the way forward being announced in more detail prior to summer 2023 recess.

On 29 July 2024, Israel's Finance Minister announced his decision to adopt a QDMTT in Israel starting from the 2026 tax year. It was also announced that Israel is not planning to adopt the Income Inclusion Rule (IIR) and UTPR mechanisms initially; the adoption of the IIR and UTPR will be re-examined following a period of implementing a QDMTT.

On 28 December 2023 the Legislative Decree implementing EU Directive 2022/2523 was published in the Official Gazette of the Republic of Italy. The text was approved by the Italian Government on 19 December 2023 taking in to account some of the amendments proposed by the Parliament (on 16 October 2023 the Government, after approving the proposal, had sent such proposal to the Parliament for review). Art 60 of the Decree provides that the law is effective for FY starting on or after 31 December 2023. The Legislative Decree empowers the Minister of Finance to issue secondary regulation.

The Minster of Finance has issued 3 Decree dealing with safe harbour (mainly CbCR TSH), Italian QDMTT (expected to be qualified and eligible for the safe harbour status) and SBIE.

Jamaica is at a preliminary stage of the legislative process, with a submission made to Cabinet to approve the implementation of the GloBE rules.

As of 31 March 2023, Japan's 2023 Tax Reform legislation was finalized, introducing an IIR. Japan’s IIR will apply to fiscal years beginning on or after 1 April 2024 (aligned with the fiscal years of the vast majority of Japanese MNCs). While Japan is expected to introduce the QDMTT and UTPR, the timing has not yet been determined. The earliest implementation would by way of the 2025 Tax Reform.

Subsequent to the passage of the 2023 Tax Reform bill, in June 2023 the Ministry of Finance issued cabinet orders and ministerial regulations in, providing additional detail regarding the operation of IIR. Further, in September 2023, the National Tax Agency (NTA) issued an additional basic circular with its various interpretation of Pillar 2 provisions. All of these publications by the Japanese government collectively form the legal basis for Pillar 2 implementation in Japan.

The 2024 Tax Reform proposals, released 14 December 2023, incorporate relevant key components from the February, July and December 2023 OECD administrative guidance. The 2024 Tax Reform legislation was passed by the National Diet on 28 March 2024.

In December 2024, the Japan governing coalition agreed to an outline of tax reform proposals for 2025 that includes the introduction of the UTPR and QDMTT in line with Pillar Two effective fiscal year 2026. The tax bill was presented to Parliament on 4 February 2025.

On October 2024 the law to adopt Pillar Two was passed and it awaits Royal Assent.

On 19 May 2023 the governments of Guernsey, Jersey and the Isle of Man published a joint statement regarding their approach to the OECD’s Pillar Two framework. Their intention is that this approach will comprise the implementation of an IIR and a domestic minimum tax from 2025. As per the Joint Statement, the three Crown Dependencies will continue to work together, monitoring implementation internationally and adapt accordingly to developments which may require adjustments to their own implementation plans. On 1 April 2022, the Government of Jersey issued an OECD Pillars One and Two tax policy reflections document. The document reiterates that Jersey is a founding member of the OECD Inclusive Framework on BEPS and that it has committed to implementing the minimum standards contained within both pillars.

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On 4 July 2024, a draft resolution of the Government of the Republic of Kazakhstan on the signing of the Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule was presented for public discussion. The period for the discussion is until 19 July 2024.

The Tax Laws Amendment Act, 2024 was assented into law on 11 December 2024 by the President and takes effect from 27 December 2024. A domestic minimum top up tax is introduced by the Act in a move seen as alignment of the country’s landscape to the international tax developments led by the OECD under the twopillar solution. The minimum top up tax is applicable on entities that are part of inscope multinational group and is aimed at bringing the effective tax rate on the Group’s profits up to the 15% minimum rate. We would expect the minimum top up tax to be relevant to Kenyan subsidiaries of multinationals which have accelerated capital allowances deductions or under lower tax regimes such as the SEZ or EPZ tax frameworks. This proposal aligns with the implementation of the OECD Two- Pillar Solution to reform international tax rules by the OECD Inclusive Framework on BEPS, of which Kenya is a member. It is expected that further guidelines on the implementation of the provision will be issued if the proposal is adopted.

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In January 2025 the Government of Kuwait released the law for the implementation of the Top-up Tax. The Top-up Tax takes the form of a Domestic Minimum Top-up Tax (“DMTT”), and will apply to MNEs that are in scope of Pillar Two. The tax will be imposed in cases where the MNE’s effective tax rate (“ETR”) in Kuwait is below 15%.

On 30 January 2024 the Cabinet of Ministers approved the draft law for partially implementing the EU minimum tax Direcitve. The partial implementation introduces certain related reporting requirements but excludes the IIR and UTPR because Latvia has decided to postpone the enforcement of these laws. Currently the draft law has been submitted to the Latvia’s Parliament for approval.

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Following its approval by the Liechtenstein parliament on 10 November 2023, the Liechtenstein government enacted the GloBE Law (global minimum tax) on 22 December 2023 to enter into force as of 1 January 2024. As such, Liechtenstein groups and companies within the threshold of global minimum tax will be subject to a QDMTT and an IIR of 15 % for tax years starting on or after 1 January 2024.

The effective date of the UTPR is to be defined separately through a second ordinance and can only enter into force on 1 January 2025 at the earliest. As such, it remains open when UTPR may be introduced.

A draft law has been submitted to the Parliament regarding the full implementation of the EU global minimum tax Directive, but is expected to come into force no earlier than 1 January 2026.

On 6 June 2024, the Seimas of Lithuania (Parlament) adopted the Law of the Republic of Lithuania on Ensuring the Minimum Taxation Level of Groups of Subjects, which partially implements the Council Directive (EU) 2022/2523 of 12/15/2022 (extension according to Article 50 (1) of the Directive).

Luxembourg implemented the Pillar Two rules in line with the Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union. On 20 December 2023, the law was adopted by the Luxembourg Chamber of Deputies.

The implementation of the EU Pillar Two Directive is through a separate law which foresees the implementation of 3 new taxes in Luxembourg, an Income Inclusion Rule tax (for fiscal years starting on or after 31 December 2023), an Undertaxed Profits Rule tax (for fiscal years starting on or after 31 December 2024) and a Qualified Domestic Minimum Top-up Tax (for fiscal years starting on or after 31 December 2023).

The law closely follows the EU Pillar Two Directive and the Transitional Safe Harbour Rules issued by the OECD in December 2022. The law currently includes most of the provisions of the Administrative Guidance which was released by the OECD in February and July 2023.

On 23 December 2024, draft law n°8396 was enacted, amending certain provisions of the Pillar Two Law. The amendments broadly incorporate the Administrative Guidance issued by the OECD until June 20224 and clarify some important principles which could be relevant for Luxembourg businesses impacted by the rules.

Subsequent to the Budget 2024 announcement in October 2023, the Government of Malaysia gazetted the Finance (No. 2) Bill 2023 in December 2023 ("Finance Act"). The Finance Act incorporated the legislative provisions of the OECD Pillar Two Model Rules into all revenue acts in Malaysia, namely the Income Tax Act 1967 ("ITA"), Petroleum Income Tax Act 1967 and Labuan Business Activity Tax Act.

The Malaysian Pillar Two Rules introduced under the Finance Act are closely aligned with the OECD Pillar Two Model Rules and will be effective for financial years beginning on or after 1 January 2025.

Malta has published the legal notice (the ‘Regulations’) confirming that Malta has elected for the delayed application of up to 6 years of the IIR and UTPR in terms of Article 50 of the EU Minimum Tax Directive. Furthermore, the Regulations do not introduce a qualified domestic top-up tax (‘QDTT’). During 2024, the government will continue to follow international developments and take action according to those developments.

Following a statement in the 2022-23 Budget Speech, the 2022-2023 Finance Act introduced the concept of a QDMTT to ensure that resident companies of large multinationals, that would be subject to a Top-up Tax under GloBE, are taxed at a minimum rate of 15%.

The Mauritius Income Tax Act has been amended to introduce the primary legislation for Pillar Two. Section 4 of the Income Tax Act stipulates that "a company forming part of an MNE group which is liable to a Top-up Tax in a year may be required by the Director-General to compute and pay a Qualified Domestic Minimum Top-up Tax in such form and manner as may be prescribed". Section 2 of the Income Tax Act includes definitions of MNE Group, Qualified Domestic Minimum Top-up Tax and Top-Up Tax, by referring to the GloBE Rules as approved by the Inclusive Framework on BEPS.
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On 17 September 2024, Budget Day, the government of the Netherlands announced amendments to the Dutch Minimum Tax Act 2024(Pillar Two) as part of the government’s 2025 Tax Package. On 3 October 2024 the government of the Netherlands announced additional amendments to the Dutch Pillar Two legislation via a memorandum of amendment.

The amendments incorporate the Administrative Guidance (AG) of the Inclusive Framework on Base Erosion and Profit Shifting (IF) of 2023 and 2024. The Netherlands follows the AG as closely as possible. The AG is incorporated in the Netherlands via legislative amendments to the extent that the government considers interpretative means insufficient.

The legislative changes are largely implemented retroactively to 31 December 2023. Changes considered not beneficial to taxpayers are implemented per 31 December 2024.

The draft legislative bill of 17 September 2024 provides the following amendments:

• MTTCs. The July 2023 AG on Marketable Transferable Tax Credits (MTTCs) is consistently incorporated in the Dutch Minimum Tax Act 2024 (Dutch MTA 2024). The rules apply retroactively per 31 December 2023.
• QDMTT SH. The July 2023 AG on the Qualifying Domestic Minimum Top-up Tax (QDMTT) and QDMTT Safe Harbour is consistently incorporated in the Dutch MTA 2024. In response to questions raised in practice supplemental clarifications have been made to secure alignment of the rules involving the Dutch QDMTT with the Pillar Two model rules, commentaries and guidance. The rules apply per 31 December 2024 and to reporting years beginning on or after this date.
• SBIE. The July 2023 AG on the calculations of the Substance-Based Income Exclusion (SBIE) is consistently incorporated in the Dutch MTA 2024. The rules apply per 31 December 2024 and to reporting years beginning on or after this date.
• CbCR SH. The July 2023 AG on the transitional Country-by-Country Reporting (CbCR) Safe Harbour is consistently incorporated in the Dutch MTA 2024. The December 2023 AG on the anti-arbitrage rules for hybrid arbitrage arrangements after 15 December 2022 is consistently incorporated in the Dutch MTA 2024. The anti-arbitrage rules apply per 31 December 2024 and to reporting years beginning on or after this date. The May 2024 CBCR guidance on mismatches is consistently incorporated in the Dutch MTA 2024; these rules apply retroactively per 31 December 2023.
• GIR. The December 2023 AG on the GloBE Information Return (GIR) on filing deadlines involving short fiscal years is consistently incorporated in the Dutch MTA 2024. The rules apply retroactively per 31 December 2023.
• Other. Technical amendments introduced involve: (i) investments in flow-through entities (cf. July 2023 AG); (ii) the conversion of FX-amounts (currency conversion; cf. July 2023 AG), and; (iii) the measure for Excess Negative Tax Carry-Forwards (cf. February 2023 AG), in conformity with AG releases. The rules apply retroactively per 31 December 2023 except for the rules involving Excess Negative Tax Carry-Forwards which apply per 31 December 2024.

The memorandum of amendment of 3 October 2024 provides the following amendments:

• Refreshing rule. The July 2023 AG on the refreshing rule for QDMTTs coming into effect in a subsequent year is consistently incorporated in the Dutch MTA 2024. The rule applies retroactively per 31 December 2023.
• Simplified jurisdictional reporting. The transitional simplified jurisdictional reporting framework developed in the July 2023 Report on the GIR is consistently incorporated in the Dutch MTA 2024. The rule applies retroactively per 31 December 2023.
• Delegated act. The format developed for GIR-purposes by the OECD in its July 2023 Report on the GIR is mandatory in the Netherlands. A basis for a delegated act is introduced to impose the relevant requirements for this purpose.

The Pillar Two Rules entered into force in the Netherlands on 31 December 2023. The legislative proposal of the Netherlands to transpose Pillar Two into the Dutch company tax system entitled Minimum Tax Act 2024 proposal was adopted by the Senate on 19 December 2023 and with that the new legislation has been substantively enacted as of that date. On Wednesday 31 May 2023, the legislative proposal was submitted to the Dutch Parliament. On 13 October 2023, the State Secretary for Finance presented the Memorandum of Amendment to the Bill on the Minimum Tax Act 2024 to Dutch parliament, introducing amendments to the original legislative proposal to amongst others legislate a QDMTT Safe Harbour. In the night of 26 and 27 October 2023 the Dutch House of Representatives adopted the legislative proposal. The legislation entered into force on 31 December 2023, in alignment with Council Directive (EU) 2022/2523. On 21 December 2023 the State Secretary for Finance released a decree introducing Pillar Two advance ruling eligibility (Decree of 19 December 2023, No. 2023-0000020007).

New Zealand enacted legislation on 28 March 2024, containing an IIR and a UTPR. It also contains a Domestic Income Inclusion Rule (DIIR) which will apply when a New Zealand headquartered MNE has undertaxed income in New Zealand - similar to a QDMTT but with some differences. New Zealand is implementing the IIR and UTPR on 1 January 2025 and DIIR on 1 January 2026.

The New Zealand legislation incorporates the OECD's Model Rules, Commentary and Administrative Guidance into New Zealand law by reference. The legislation provides for future amendment intended to ensure consistency with additional guidance to be published by the OECD.

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A delegation from the OECD met with Nigerian representatives on 4 and 5 April 2023 at a workshop it jointly organised with the Federal Inland Revenue Service (FIRS), to discuss the maximisation of the benefits of the Two-Pillar Solution for Nigeria. Nigeria is one of the four members of the Inclusive Framework that did not endorse the set of rules.

At the meeting it was resolved that “there is the need for Nigeria’s continued participation in the rule development, as a member of the Inclusive Framework, to ensure that the interest of the country and Africa is factored into the design and development of the rules.”

The Outcome Statement noted that, whether or not Nigeria endorsed the statement of October 2021, and the detailed rules to be released later to address challenges arising from the digitalisation of the economy, the country’s tax base and fiscal policy options will be impacted by the implementation of the Two-Pillar solution, especially the Pillar Two Global Minimum Tax Rules of 15% effective tax rate.

The meeting consequently observed that there was the need for Nigeria to immediately implement fiscal policy measures to address these potential impacts.

On December 27, 2024, the North Macedonian parliament approved the country’s global minimum tax law, introducing a domestic top-up corporate income tax effective retroactively for tax years starting January 1, 2024

The Norwegian Top-up Tax Act related to IIR and QDMTT is implemented as of 1 January 2024. The secondary law entered into force on 26 March 2024.

On 24 November 2023, the Norwegian Ministry of Finance had presented the new law proposal related to the IIR and QDMTT.

In the 2025 National Budget, the Norwegian government proposes to introduce the UTPR into Norwegian law. The proposal to introduce the UTPR was sent out for consultation on 19 June 2024, with a deadline 2 September 2024. The UTPR will be implemented by adding new provisions to Chapter 2 of the Supplementary Tax Act with supplementary regulatory provisions. The changes are proposed to take effect from the 2025 income year (for fiscal years starting after 31 December 2024). The proposal to introduce the UTPR is, as expected, based on the OECD's model framework.

The Sultanate of Oman issued royal decree 70/2024 that introduces a Top-up Tax. The Top-up Tax takes the form of an Income Inclusion Rule (“IIR”), and will apply to MNEs that are in scope of Pillar Two. The IIR is effective from 1 January 2025. There is no indication on whether Oman will also introduce a Domestic Top-up Tax

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In 2016, the Peruvian Congress formed the Special Commission for Monitoring the Incorporation of Peru into the OECD (CESIP - OECD) with the main purpose of supervising the political control of the actions carried out by the Executive Power in the matter. In March 2023, the Executive Power formed the Multisectoral Commission of a permanent nature to promote follow-up actions aimed at a greater vinculation between Peru and the OECD, to supervise the accession process of Peru to the OECD under the Presidency of the Council of Ministers. Likely, as part of this process, Peru will introduce the Pillar Two rules although there has been no formal announcement yet.

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On 15 November 2024, the Polish Act implementing the provisions of the EU global minimum tax Directive into the Polish legal system was signed by the President. The law will introduce IIR, UTPR, and QDMTT. The law generally intends to come into effect from January 1, 2025. Transitional provisions provide for the optional possibility of retroactive application of the provisions of the law from January 1, 2024 (with some exceptions - UTPR rules).

On 18 September 2024, the Portuguese Government submitted to the Parliament the draft legislation for the domestic transposition of the GloBE Pillar Two rules, with request for "priority and urgency". This proposal follows several contacts and feedback at the level of the Large Taxpayers Forum, as well as a public consultation held during the latter half of July 2024.

The proposed regime, presented under Draft Law no. 21/XVI/1.ª, was approved by the Portuguese Parliament on 18 October 2024 and was published in the Portuguese Official Gazette on 9 November 2024.

During 2024 the PR Legislature did not consider a Pillar two bill that had been under discussion. There were talks around considering such bill during an extraordinary session in November/December 2024 but that did not finally happen. There is a new governor in Puerto Rico as of 2025 who committed to examine the potential to come up with a new proposal for Pillar Two. The governor created a tax committee with the task of coming up with recommendations for a broad tax reform including Pillar Two.

On 4 December 2024, Qatar’s Council of Ministers announced their approval of a draft law amending certain provisions of Law No. (24) of 2018 on Income Tax Law. The amendments include the introduction of a QDMTT. The Shura Council approved the law in December 2024. The amendments to the Qatar Tax Law in respect to Pillar Two still need to be submitted to the Emir of Qatar for final approval and enactment. Once endorsed the amended law will be published in the Official Gazette.

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Law no. 431/2023 transposes the provisions of Directive (EU) 2022/2523 to introduce into the Romanian legislation a complex system of rules for an effective minimum taxation of 15% for multinational enterprise groups and large-scale domestic groups with annual consolidated revenues of at least EUR 750 million in at least two of the four previous financial exercises. The President of Romania promulgated the Law on 29 December 2023. It became Law no. 431/2023 and was published in the Official Gazette no. 8 dated 5 January 2024. Law no. 431/2023 applies to financial exercises starting as of 31 December 2023.

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In the 2024 Budget presented in Parliament on 16 February 2024, Singapore announced that it will implement the IIR and a Domestic Top-up Tax for in-scope multinational enterprises from their financial year beginning on or after 1 January 2025. The legislation was passed in Parliament in October 2024. On 27 November 2024 the Income Tax (Amendment) Act 2024 and Multinational Enterprise (Minimum Tax) Act were published in the country’s official gazette.

The Law on minimum Slovak top-up tax for for multinational enterprise groups and large-scale domestic groups was approved by the parliament on 8 December 2023 with effective date as of 31 December 2023, i.e. for all accounting periods starting after this date. On 28 November 2024 the Slovakia parliament approved a draft bill to amend the Pillar Two legislation to incorporate 2022 and 2023 OECD Administrative Guidance.

In August 2023 the Ministry of Finance of the Slovak Republic released a draft of the Qualified Domestic Top Up Tax Act for comments. No announcement related to the IIR and UTPR has been released yet.

The Slovenian Official Gazette published on 22 December 2023 a Law, ensuring a global minimum tax rate for Slovenian constituent members of multinational enterprises and large domestic groups, under the OECD’s Pillar Two approach and Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union.

On 28 December 2023 also a brochure presenting steps in calculation of the top-up tax was published on the website of Slovene Financial Administration.

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On 24 December 2024 the South Africa’s legislation that partially implements the Pillar Two rules was published in the government gazette after receiving President’s assent. The Global Minimum Tax Act, 2024 provides for an IIR and a DMTT that apply to fiscal years starting on or after January 1, 2024. It does not include an undertaxed profits rule.

In the 2024 Budget Review documentation, published on 22 February 2024, it was announced that the Pillar Two rules, in the form of an Income Inclusion Rule ('IIR') and Domestic Minimum Top-up Tax ('DMTT'), are to enter into force in South Africa for fiscal years starting on or after 1 January 2024. To give effect to this, the Draft Global Minimum Tax Bill and Draft Global Minimum Tax Administration Bill were published on the same day, together with an Explanatory Memorandum. It is expected that the legislation will be finalised and enacted following a process of public consultation, subject to any amendments arising from the public consultation process. The draft legislation is stated as incorporating the OECD Model Rules, Commentary and Administrative Guidance issued by the OECD, subject to certain specified departures.

The revised LCITA law was announced on 31 December 2024, and is enforced starting 1 January 2025. This law finalizes the draft content that was announced on 25 July 2024.

On 25 July 2024, the Korean Ministry of Economy and Finance released tax reform proposals, which include additional provisions that have not yet been incorporated into the Law for Coordination of International Tax Affairs ('the LCITA'). These provisions include the GloBE Safe Harbour, UTPR Transitional Safe Harbour rules and other aspects covered in the Model Rules, Commentary, and Administrative Guidance.

On 22 March 2024, the Enforcement Regulations of the LCITA were enacted, incorporating many aspects covered in the Model Rules, Commentary, and Administrative Guidance into domestic tax law.

On 25 January 2024, the Korean Ministry of Economy and Finance released a subsequent draft Presidential Decree of the LCITA for public consultation in relation to the Pillar Two rules. The draft Presidential Decree provides more elaborate guidance on the Pillar Two Rules related to allocation of GloBE Income or Loss and Covered Taxes between Constituent Entities (especially PEs and Investment Entities), calculation of Top-up tax, new requirements for the qualified UTPR and QDMTT, compliance for Korean Constituent Entities responsible to pay the UTPR Top-up tax, and transitional penalty relief for noncompliance with the GIR submission.

On 21 December 2023, South Korea’s parliament approved a delay of Korea’s UTPR for one year (i.e., to take effect on 1 January 2025. It was originally scheduled to take effect on 1 January 2024). The IIR will remain in force from 1 January 2024.

On 9 November 2023, the Korean Ministry of Economy and Finance released a draft Presidential Decree for public consultation in relation to the Pillar Two rules that were enacted as a new chapter to the LCITA at the end of 2022. The draft Presidential Decree provides additional guidance on the Pillar Two rules from Article 100 to Article 167 of the Presidential Decree of the LCITA. The draft was promulgated on 29 December 2023.

The Pillar Two rules were adopted in the amended LCITA which was approved by the Korean parliament on 23 December 2022. The rules are in line with the OECD Model Rules.

On 21 December 2024, Law 7/2024 of 20 December was published in the Official State Gazette (BOE), which, among others, transposes Council Directive (EU) 2022/2523 in Spain introducing a complementary tax to guarantee a minimum global level of taxation for multinational groups and large national groups.

Sri Lanka is a member of the OECD/G20 Inclusive Framework on BEPS but has not joined the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy

In February 2023 a first proposal implementing the global minimum tax under the OECD GloBE rules and the EU Directive 2022/2523 of 14 December 2022 was released and in March, a supplement was issued. On 31 August 2023 the proposal to transpose the implementation of the global minimum tax was referred to the Legislative Council for their review. In substance, the Legislative Council proposal did not contain any major changes in relation to the previous proposals. On 17 October 2023, the Legislative Council's opinion on the draft bill was published. The Council was highly critical of the fact that the time taken to prepare the proposal had been far too short and raised a number of linguistic and structural comments. On 26 October 2023, the Government submitted the bill to the Swedish parliament. On 13 December 2023 the Swedish Parliament voted to implement Pillar Two into Swedish law. The rules went into force on 1 January 2024.

The Swedish rules include provisions covering the main elements of the rules which have been agreed by the Inclusive Framework. The Swedish rules contain a QDMTT, an IIR, and a UTPR. The Swedish rules currently in force do not, however, take fully into account the Administrative Guidance published by the OECD throughout 2023. To that end, proposed changes to the Swedish law were suggested on 19 March 2024. This concerns, for example, the measures necessary to ensure that the Swedish QDMTT meets the conditions for benefiting from another country’s QDMTT safe harbour rules. Among other changes suggested in the promemoria issued on 19 March 2024, one can mention modifications to the foreign tax credit act that enable offsetting foreign QDMTTs against taxes due under the Swedish CFC rules.

The proposed legislative changes are proposed to take effect on 1 January 2025, and apply for the first time for tax years beginning immediately after 31 December 2024. However, it is proposed that the reporting entity may request that all or certain of the proposed provisions be applied already for tax years beginning immediately after 31 December 2023, if it would be advantageous for the group.

The amendments suggested on 19 March 2024 have been subject to a public consultation in Sweden and are expected to be adopted, possibly with some modifications, during 2024.

The Swiss government (Federal Council) decided on 22 December 2023 to implement the Pillar Two rules in Switzerland. The respective Federal ordinance was published in the Federal gazette on 28 December 2023. Switzerland implemented a QDMTT from 1 January 2024.

During its meeting on 4 September 2024, the Federal Council decided to bring the income inclusion rule (IIR) into force with effect from 1 January 2025. In contrast, the Federal Council has decided not to bring the UTPR into force for the time being.

Taiwan's Ministry of Finance has confirmed on 30th August, 2023 that there is no predefined timeline for the implementation of the Pillar 2 GloBE rules in Taiwan. Instead, they propose the following steps:

In the short term, the primary focus should be on reviewing Taiwan's tax system, offering modest tax incentives to maintain a 15% effective tax rate for multinational enterprises (MNEs), and reducing compliance costs for MNE groups operating in Taiwan. On August 28, 2024, the Ministry of Finance issued a draft amendment to the Income Basic Tax Act. This amendment will adjust the Alternative Minimum Tax (“AMT”) rate applicable to profit-making enterprises located in Taiwan that belong to multinational enterprise groups meeting the applicable threshold of Pillar Two, raising it from 12% to 15% from 2025 onward. For profit-making enterprises located in Taiwan that do not fall under the previous provision, the AMT rate will remain at 12%. This adjustment is in line with the ability-to-pay tax principle and aims to balance the tax burden between large and small enterprises.

In the medium term, considering a Qualifying Domestic Minimum Top-Up Tax (QDMTT) is advisable to prevent other jurisdictions from imposing top-up taxes on low-taxed entities based in Taiwan.

In the long term, the potential adoption of the Inclusive Framework's Income Inclusion Rule (IIR) and Undertaxed Payment Rule (UTPR) aspects of the GloBE rules will be assessed, depending on the progress of international implementation.

The Emergency Decree on Top-up Tax, B.E. 2567 (2024) was promulgated in Thailand on 26 December 2024. The legislation brings all three charging mechanism, the IIR, the UTPR, and the Thai DMTT to apply for accounting periods beginning on or after 1 January 2025.

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On 28 July 2024, General Assembly of the Turkish Parliament approved the law to implement the Pillar Two Rules. Subsequently, the Law numbered 7524 and titled "Law on Amendments to Tax Laws and Certain Laws and Decree Law No. 375" covering Pillar Two legislation was submitted to the Presidency for approval on July 28, 2024. The Law covering the Pillar Two rules has been published in the Official Gazette at 2 August 2024.

Pillar Two is defined as a priority direction in the National revenue strategy 2024-2030, approved by Decree the Cabinet of Ministers of Ukraine № 1218 as of 27.12.2023. No public discussion or draft legislation yet.

The DMTT Ministerial Decision was issued on 6 February 2025.

The UAE introduced a Federal Corporate Tax on business profits that is effective for financial years starting on or after 1 June 2023. As part of this, the MoF released a public consultation that included their action statement for the implementation of the Corporate Tax Law alongside other matters of consideration. The public consultation document included a brief commentary on the implementation of Pillar Two “as the work is ongoing at the Inclusive Framework level, further announcements on how the Pillar Two rules will be embedded into the UAE corporate tax regime will be made in due course”.

On 24 November 2023, the Cabinet of Ministers issued Federal Decree Law No (60) of 2023 with regards to amendments to the provisions of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Business (CT Law). The amendments introduce some key terms from the GloBE Model Rules, including a definition for Top-up Tax and Multinational Enterprise; and appear to be the first step in laying the foundations for the subsequent implementation of GloBE in the UAE. Law No (60) stipulates that further details on the Top-up Tax including the rules, conditions, procedures and effective date will be determined by a decision of the Council of Ministers based on the UAE Minister of Finance’s proposal, and the respective decision will be published in the Official Gazette in due course.

On 15 March 2024, the UAE Ministry of Finance (MoF) launched a digital public consultation on the Pillar Two rules based on the OECD Model Rules. The MoF states that the objective of this consultation is to gather the views of stakeholders with respect to the potential policy design options to respond to the implementation of the GloBE Rules worldwide. Responses to the public consultation are expected to help the UAE MoF arrive at the policy options that could be adopted as part of the UAE’s GloBE Rules, taking into account aspects such as domestic implementation issues, interactions with the UAE’s corporate tax system and ways to minimise compliance costs.

Alongside the consultation questionnaire, a separate Guidance Paper has been prepared which provides details on the specific aspects of the GloBE Model Rules. This can be accessed on the MoF’s webpage and it provides an overview of the proposed rules in accordance with the OECD Model Rules, i.e. scope, GloBE calculation criteria, collection mechanisms, safe harbours etc. The consultation questionnaire provides a number of policy options that the UAE may consider as it designs the Pillar Two Rules. In general, the main purpose of the consultation process is to seek stakeholder views on the different aspects of the Pillar Two Rules from a policy aspect. However, the UAE MoF has not given any clear indication on how the UAE will implement the rules. Further details to be expected in due course. The public consultation was open until 10 April 2024.

The MoF announced that Pillar Two rules will not be implemented in 2024, the UAE has also confirmed that it intends to allow the submission of the GloBE Information Return to the UAE competent authorities for 2024. Further information regarding this is expected to be released by the MoF in due course.

Legislation was enacted in the UK on 11 July 2023 which introduced an Income Inclusion Rule (IIR), known locally as the “multinational top-up tax”, and domestic minimum top-up tax (DTT), as part of Finance (No 2) Act 2023.

Both the UK IIR and the UK DTT apply for accounting periods beginning on or after 31 December 2023.

On 18 July the UK government published proposals for a number of amendments to the UK’s Pillar Two rules for inclusion in Finance Bill 2024. These include measures to implement an Under Taxed Profits Rule (UTPR) in the UK. The draft provisions do not include a commencement date, and will not take effect until they have been included in a Finance Bill, but (as previously indicated) HMRC has confirmed that the commencement date will not be earlier than accounting periods beginning on or after 31 December 2024.

House Ways and Means Republicans introduced the Defending American Jobs and Investment Act on 25 May 2023. The proposal would increase income tax and withholding tax rates, initially by 5 percentage points, increasing up to 20 percentage points on certain foreign citizens, foreign corporations, and foreign partnerships of any foreign country that is listed in a report on the extraterritorial taxes and discriminatory taxes of foreign countries submitted by the Secretary of the Treasury.

In the bill, the extraterritorial tax appears to focus on the undertaxed profits rule (UTPR) and the discriminatory tax appears to focus on digital services taxes (DSTs). Nevertheless, Democrat control of the Senate will prevent action on any Republican-controlled House legislation in the near term.

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The Vietnam National Assembly finally approved the Resolution on Global Minimum Tax policy on 29 November 2023. The Resolution takes effect from 1 January 2024. The Resolution provides that Vietnam adopts (i) the QDMTT rule and (ii) the IIR. This aims to protect Vietnam’s tax base in light of the fact that many countries that have investments in Vietnam have announced that they will introduce the IIR from 2024 (e.g., Japan, Korea, etc.).

On 15 November 2024 the Ministry of Finance in Vietnam released the draft decree on the global minimum tax with further detailed guidance. This draft decree was open for comments until 6 December 2024. Key highlights of the draft decree:

• Financial year 2024 is defined as the accounting period starting on or after January 1, 2024. However, if the ultimate parent entity’s (UPE) financial year begins in December 2023, that period will also be considered FY2024 under this draft. The financial year for constituent entities (CEs) in Vietnam will align with the UPE’s financial year to ensure consistency and simplified compliance.
• Financial accounting standards used for consolidated financial statements will apply for QDMTT purposes. If it is not feasible to determine a CE’s net income or loss using these standards, another acceptable or authorised financial accounting standard (such as the Vietnamese Accounting Standard) may be used. However, adjustments are required for permanent differences over EUR 1 million that results from discrepancies between these standards and the standards used for consolidation.
• MNE groups can decide how to allocate the top-up tax liabilities among their CEs in Vietnam, which has to be declared to the tax authorities.
• If an MNE has multiple CEs in Vietnam, one entity must be nominated to pay the QDMTT within 30 days of the financial year end. The nominated CE must also submit an application for a tax code within 90 days of the financial year end and provide the General Department of Taxation with a list of CEs subject to the QDMTT within 9 months of the financial year end.

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Section 7 of the Finance Act No13 of 2023 gazetted the legislation that introduces the domestic minimum tax up tax of 15% in 2024