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A collection of the brief insights throughout November 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update.

22 December 2021 - European Commission publishes draft Directive on implementing Pillar Two 15% minimum ETR

On 22 December 2021, the European Commission (EC) published its proposal for a Council Directive “on ensuring a global minimum level of taxation for multinational groups in the Union” (Draft Directive) aimed at implementing the OECD Pillar Two Model Rules on a 15% minimum effective tax rate (see our Tax Policy Alert of 20 December) in the EU Member States.

The Draft Directive closely follows the OECD Model Rules, which set out the rules of the so-called Income Inclusion Rule (IIR) and Undertaxed Payment Rule (UTPR). However it departs from the Model Rules “with some necessary adjustments, to guarantee conformity with EU law.” The major key differences are:

No EU Action is provided for at this stage with regard to the related OECD Pillar Two Subject-to-Tax Rule (STTR).