After long debates, Member States have finally achieved unanimity for passing the directive proposal

After long debates, Member States have finally achieved unanimity for passing the directive proposal
In October 2021, the OECD reached an historic agreement to introduce significant changes in the international tax arena aimed at updating it to the current environment. This agreement was based on two pillars: Pillar One focuses on the taxation of large, highly profitable corporate groups (with a turnover exceeding €20 billion and 10%, respectively) in their market jurisdictions, and Pillar Two seeks to ensure a 15% effective tax rate for corporate groups whose turnover exceeds €750 million.
The following months showed, for various reasons, that further developments have been achieved regarding the minimum global taxation addressed by Pillar Two. However, one of the main problems posed for its implementation was the unwillingness of several EU Member States, also based on different reasons. This made it impossible to reach the unanimity required for passing the Directive proposed by the European Commission in December 2021.
However, after being eliminated from the ECOFIN’s agenda, on the night of December 12, 2022, at the closing stages of the Czech Presidency, Member States agreed upon the Proposal.
Next, legislative procedures within the Union will be addressed, which will be followed by the approval of the domestic regulations of each Member State. This requires significant developments for the coming dates not only because in 2022 several proposals have been published (only one will be approved, and according to the request of the Presidency it seems that it will be the text of November 25, 2022), but also because national legislators face the complex task of incorporating this regulation into their domestic legal systems. All of this within a very strict time frame owing to the commitment agreed in the OECD: the rules must be approved in 2023 and be in force by 2024.
For the taxpayers affected, the uncertainty regarding Pillar Two’s effective implementation comes to an end, being 2023 a key year for preparing and adapting their systems to the new regulations. However, according to the schedule, the first returns should be submitted in the first half of 2026.
Although any detailed analysis must be reserved for the final version of the regulations, we include below a summary of the main elements of this minimum global taxation system:
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