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Australian Federal Budget 2023-24

The Australian Treasurer Dr Jim Chalmers handed down his second budget on 9 May 2023. The 2023-24 Federal Budget contained a wide range of tax and superannuation related measures and implementation of Pillar Two of the Organisation of Economic Cooperation and Development / G20 Two-Pillar Solution to address digitalisation of the economy.

Pillar Two webcast: When Tax Policy Meets Implementation, Administrative guidance, readiness, and compliance issues

On this webcast from 25 April, our tax policy specialists reviewed unresolved technical issues, as well as the administrative guidance to date. They also discussed how countries are implementing the rules, and how businesses can deal with what we know and don’t know. In the latter category, one big question is what is being built into the regime for increasing tax certainty during the transition and beyond?

TP Podcast: The endgame begins – Navigating TP implications in the coming Pillar Two world

This TP Talks episode is part 3 of a three-part series on Pillar Two, where Ugo Cannavale (Transfer Pricing Leader for PwC Italy), Kartikeya Singh (Transfer Pricing Principal in PwC’s US National Tax Services practice), and Giorgia Maffini (Transfer Pricing and Tax Policy Director with PwC UK) discuss the latest Pillar Two developments, country level developments, and what companies need to prioritize from a transfer pricing perspective.

Germany publishes Pillar Two discussion draft

Germany's Federal Ministry of Finance (MoF) published a draft law on 20 March to implement the ‘Pillar Two’ Directive ensuring a global minimum taxation for multinational groups and large domestic groups in the European Union (the so-called Minimum Tax Directive Implementation Act - MinBestRL-UmsG).

PwC publishes Pillar Two Data Input Catalog

Pillar Two brings unprecedented changes to the global tax system, impacting large multinational companies that operate under the reformed international tax framework. We recently published our Pillar Two Data Input Catalog, which highlights the urgency for taxpayers to start preparing for Pillar Two, outlining anticipated divergences in Pillar Two rules, calculation complexities, and considerations in developing an extensive data strategy.

OECD releases Administrative Guidance on the Pillar Two Global Minimum Tax Rules

The OECD released Administrative Guidance (‘guidance’) on the Pillar Two Global Anti-Base Erosion Rules (GloBE Rules) on 2 February. The guidance was approved by the OECD/G20 Inclusive Framework on BEPS (IF) and is therefore not subject to public consultation. The guidance primarily focuses on (some but not all) previously unaddressed areas under the GloBE Rules.

OECD announces Pillar Two GloBE information return consultation

The GloBE Model Rules require MNE groups to file a standardised GloBE information return (GIR) in each relevant jurisdiction that has introduced the GloBE rules. The public consultation document on the GIR indicates that the ultimate objective of the GIR is to develop a consistent and transparent set of standards for information collection that preserves consistency and certainty of outcomes for MNE groups, while avoiding a significant increase in taxpayer and tax administrations’ compliance burdens.

OECD announces Pillar Two tax certainty framework consultation

Given the complexity of the Pillar Two rules and the differences that could arise in the interpretation or application of the rules among jurisdictions, the OECD started working on exploring mechanisms to provide further tax certainty with respect to the GloBE rules. This public consultation on Pillar Two – Tax Certainty for the GloBE Rules seeks input from stakeholders with respect to the scenarios where differences in interpretation or application of the GloBE rules between two or more jurisdictions may arise.

EU Member States give final approval to proposed Pillar Two Directive

On 15 December, the EU Council formally adopted the EU minimum tax Directive by written procedure. The written procedure ended 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. The Directive will enter into force on 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. All Member States voted in favour of the accompanying Council Statement. This outcome follows a week of speculation on the deal after Poland reserved its support until yesterday’s EU Council meeting.

EU Member States reach provisional agreement on proposed Pillar Two Directive

On 12 December 2022 the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (COREPER) agreed in principle on the introduction of a global minimum taxation proposal by the EU Member States. The COREPER decided to advise the Council to adopt the draft Pillar Two Directive and approved the related Council statement. A written procedure for formal adoption of the Directive is expected to conclude on 14 December.

UK publishes draft Pillar Two legislation

For inclusion in Finance Bill 2022/23, the UK has released draft legislation to introduce the OECD’s Pillar Two Model Rules into UK law. The draft legislation includes an Income Inclusion Rule (IIR), to be known in the UK as the Multinational Top-up Tax, which will apply to accounting periods beginning on or after 31 December 2023.

Korea releases draft Pillar Two rules

As part of 2022 tax reform, the Korean Ministry of Strategy and Finance (MOSF) recently announced the introduction of draft domestic legislation for a global minimum tax. Korea’s summary draft rules, released in Korean, correspond closely to the OECD’s Pillar Two Model Rules, which was led by the OECD / G20 and has been agreed upon by 141 countries in the Inclusive Framework. Detailed legislation is expected in December.