On 20 December 2021 the OECD / G20 Inclusive Framework on BEPS released Model GloBE Rules under Pillar  Two. On 22 December 2021 the European Commission published a proposed EU directive to incorporate Pillar  Two into EU law. The GloBE Rules aim to impose a global minimum tax of 15% on MNEs with a revenue in excess of EUR 750 million or more. The rules are due to be brought into law in 2022, to be effective in 2023 for the Income Inclusion Rule (IIR), and 2024 for the Undertaxed Payment Rule (UTPR).

Three shots at achieving global minimum tax rate

Qualified domestic tax

  • Possibility for jurisdictions to introduce a domestic minimum taxation, which if qualified, reduces the jurisdictional Top-up Tax

  •  If a positive Top-up Tax remains, IIR to apply

Income Inclusion Rule (IIR)

  •  Imposes Top-up Tax on a parent entity in respect of low-taxed jurisdictions within an MNE group

  • Considered the “main rule” within the overall Pillar  Two rule set

Undertaxed Payments Rule (UTPR)

  • “Back-stop” or “secondary rule” to the IIR

  • Denies tax deductions, or requires an equivalent adjustment, to the extent low tax income is not already subject to an IIR

Determine the impact

Our expert team can help you assess the possible impact of the GloBE Rules using the following step plan:

Step 1: Identify Constituent Entities in scope

Step 2: Determine GLoBE Income

Step 3: Identify and Allocate Covered Taxes

Step 4: Calculate Effective Tax Rate and Top-up Tax

Step 5: Impose Top-up Tax under IIR or UTPR

Pillar  Two - Maritime Industry

The GloBe rules have a specific impact on the Maritime Industry.  Our specialists provide insights into experts view on the impact of Pillar  Two on the Maritime Industry.  Let us help you identify the impact of the new rules on your current maritime business model and legal structure and assist you in establishing whether the shipping exclusion applies to your current set-up.

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