On 12 June, the Luxembourg government submitted a draft law (n° 8396) to amend the law of 22 December 2023 introducing the Pillar Two minimum taxation rules. The Pillar Two Law introduced the Income Inclusion Rule (“IIR”), Undertaxed Profits Rule (“UTPR”) and Qualified Domestic Minimum Top-up Tax (“QDMTT”) into Luxembourg law for fiscal years starting on or after 31 December 2023 (with a general one year delay for the UTPR to become effective).
While the draft law mainly aims to incorporate administrative guidance issued by the OECD until the end of 2023, the commentary to the draft law clarifies some important principles which could be relevant for Luxembourg businesses impacted by the rules.
The administrative guidance issued by the OECD on 17 June 2024, that is specifically relevant with respect to the exclusion of securitisation vehicles from QDMTT, has so far not been included in the draft law. This shows the complexity for Luxembourg and other jurisdictions to continue incorporating additional guidance on an ongoing basis.
Read more in this PwC alert.