Posted: 13 Dec. 2022 3 min. read

Pillar 2: Agreement on EU Directive

After several attempts, a political agreement was reached on 12 December 2022 regarding the Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union and thus the implementation of Pillar 2 was green-lighted. After lengthy negotiations, also the agreement of Hungary, and thus the necessary unanimity, has now been achieved.




The starting point for the global minimum taxation now adopted are the model rules published last year by the OECD on the so-called two-pillar model which is now to be implemented by the member states in 2023 based on the latest draft version of the Directive of the Council of the European Union of 25 November 2022. While the first pillar (Pillar 1) developed a new system for allocating international taxation rights in the light of new (digital) business models, the second pillar (Pillar 2) provides for minimum taxation for multinational companies. In deviation from the OECD model rules for Pillar 2, the Directive also applies to large-scale domestic groups.

The aim of the Pillar 2 regulations is to ensure that companies are taxed on their global profits at an effective tax rate of at least 15%. This is to be ensured by a supplementary tax (so-called “top-up tax”), which will be levied in the amount of the difference between the global minimum tax rate of 15% and the lower effective tax rate. Technically, the global minimum taxation to be applied to financial years beginning after 31 December 2023 will be implemented through the income inclusion rule or IIR and the undertaxed profit rule or UTPR, respectively.

In principle, the Pillar 2 rules apply to groups with annual group turnover of  EUR 750 million or more, which must be met in at least two of the four preceding financial years. The Directive also covers minority-owned constituent entities, joint ventures and multi-parented groups. Furthermore, numerous simplification and transitional provisions are provided for. However, certain entities such as governmental entities or non-profit organizations as well as investment or pension funds are excluded from the Directive.

As of the effective date, for each constituent entity included in a multinational or domestic group in scope of the Directive, a standardized top-up tax return has to be filed, even if no top-up tax is due for the entire group or a constituent entity. The tax return must be filed within 15 months of the end of the financial year (for the first year of implementation, the tax return has to be filed within 18 months).

For more details on the new regulations, we refer to our Tax & Legal News from 20 July 2022 (German only).


Effects on Accounting and Taxes


In addition to filing and notification obligations, the extensive and in some cases highly complex regulations on global minimum taxation in particular lead to an increased compliance effort in order to ensure the data collection and exchange of information within the group for the determination of the qualifying income and the effective tax rate or, if applicable, the top-up tax. Depending on the individual corporate structure, this can result not only in challenges for accounting and tax departments, but also for the IT landscape for setting up the necessary technologies and processes.

If you have any questions regarding the individual regulations in detail or further questions regarding the implementation in your company, your contact persons at Deloitte will of course be happy to assist.


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Mag. Karin Andorfer

Mag. Karin Andorfer

Partner Steuerberatung | Deloitte Österreich

Karin Andorfer ist Partnerin in der Steuerberatung bei Deloitte in Wien. Sie ist Steuerberaterin und betreut zahlreiche nationale und internationale Klienten in verschiedenen Branchen. Ihre Tätigkeitsschwerpunkte liegen insbesondere in den Bereichen der nationalen und internationalen Steuerberatung sowie im Bereich Transfer Pricing / Verrechnungspreise.

Dr. Katharina Luka

Dr. Katharina Luka

Senior Manager Steuerberatung | Deloitte Österreich

Katharina Luka ist Steuerberaterin bei Deloitte Wien. Ihre Tätigkeitsschwerpunkte liegen insbesondere in den Bereichen Körperschaftsteuer, internationales Steuerrecht und in der Umgründungsberatung. Sie ist zudem als Fachautorin und Fachvortragende tätig.