Tax
What is the current status of Pillar II implementation in Europe?
In recent months, many states have made legislative changes related to implementing the Pillar II regulation. A brief overview of the most important updates is provided below.
- A standardised form to facilitate Pillar II obligations: On 28 October 2024, the European Commission adopted the “DAC9” proposal, which amends the directive on administrative cooperation in the field of taxation to facilitate companies in meeting the obligations arising from Pillar II. Under the proposed regulation, it would be sufficient for groups within the EU to complete only one standardised form at the central level instead of the current information requirement for each member of a large multinational group or a large-scale domestic group. If the proposal passes the EU legislative process, individual states will be required to implement “DAC9” by 31 December 2025.
- Hungarian member entities are/were required to report their status concerning domestic and allocated top-up tax to the Hungarian tax authorities by the end of the fiscal year using a specific form.
- On 17 October 2024, the German government published an official form by which a German company in the group must electronically inform the tax office of its status as the “Group Head” within two months after the end of the fiscal year for which there is a tax obligation. Therefore, the first reporting deadline is 28 February 2025 for groups with a fiscal year identical to the calendar year.
- On 30 October 2024, the United Kingdom published changes regarding allocated and domestic top-up tax, clarifying certain definitions and procedures for calculating and paying top-up tax, as well as refining the regulation of the undertaxed profits rule.
- Bulgaria, Finland, France, Ireland, Luxembourg, Germany, the Netherlands, Slovakia, and Sweden have incorporated the 2023 OECD Administrative Guidance on Pillar II into their national laws to facilitate the application and implementation of obligations arising from Pillar II.
- The European Commission submitted Cyprus, Poland, Portugal, and Spain to the Court of Justice of the EU on 3 October 2024, for failing to implement the directive on the global minimum tax into their legal systems. Poland and Portugal subsequently implemented the directive in November 2024, and Spain in December 2024.
- On 22 October 2024, Jersey adopted a law implementing the regulation arising from Pillar II. The regulation is effective from 1 January 2025.
