Vote of the law for the implementation of Pillar Two minimum taxation rules in Luxembourg
20/12/23
In brief
On 20 December 2023, the Luxembourg Parliament voted to approve the draft law n°8292 transposing the EU Council Directive 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union, known as the EU Pillar Two Directive or the GloBE (Global anti-Base Erosion) Directive.
The law will enter into force as from fiscal years starting on or after 31 December 2023.
In detail
The Income Inclusion Rule (IIR) and the Qualified Domestic Minimum Top-up Tax (QDMTT) are set to become effective for fiscal years starting on or after 31 December 2023, whereas the Undertaxed Profits Rule (UTPR) would become effective for fiscal years starting on or after 31 December 2024
The main provisions of the new law transposing the EU Pillar Two Directive in Luxembourg, detailed in our previous PwC Flash newsletters posted on 7 August 2023 and on 16 November 2023, remain unchanged.
Luxembourg releases draft law to implement global minimum tax
Luxembourg amends its draft law introducing global minimum tax
Takeaway
The text of the law strictly adheres to the text of the EU Pillar Two Directive, with some additions introduced to reflect the OECD Administrative Guidance released in February and July 2023. Certain aspects remain unresolved, such as the possibility to rely on certain elections foreseen in the OECD Administrative Guidance.
Further amendments may be expected in the future to reflect some of the OECD Administrative Guidance which has so far not been included in the law, and the additional OECD Administrative Guidance which was released on 18 December 2023.
As the EU and other countries move toward enacting the Pillar Two, businesses will need to navigate intensive data collection, analysis and compliance. PwC Luxembourg and the PwC network firms provide tailor made solutions to prepare groups for their Pillar Two obligations, including estimating potential top-up tax impact, preparing systems for data gathering and automation, upskilling teams and assisting groups with the Pillar Two compliance process.
Have a look at PwC's Pillar Two Training Programme, a customised training course to upskill your teams, adapted to the needs of your organisation and business industry.
Contact us
Murielle Filipucci
Tax Partner, Global Banking & Capital Markets Tax Leader, PwC Luxembourg
Tel: +352 49 48 48 3118
Nenad Ilic
Tax Partner, Banking & Capital Markets Tax Leader, PwC Luxembourg
Tel: +352 49 48 48 2470
