The Draft Decree, in line with the GloBE Rules and the Directive, provides for the UTPR as a charging provision. The UTPR will be effective for fiscal years that begin on or after December 31, 2024.

The Draft decree provides for a QDMTT that will be applicable for fiscal years that begin on or after 31 December 2023.

The same is provided for MNE groups in the initial phase of internationalization and for large scale domestic groups (see par 8 of art 11 of the Draft Decree). This point is highlighted in the Draft Decree as subject to additional scrutiny (also based on outputs of the public Consultation).

The presentation paper that accompanies the draft Decree specifies that the Italian Domestic Minimum Tax has been designed to meet the requirement to be considered "qualified" (and hence to be a QDMTT) and a safe harbour.

The Draft Decree provides the definition of Covered Taxes ("Imposte rilevanti") in article 20. No guidance on the characterization of Italian taxes has been provided yet.

Based on standard accounting practice under IAS/IFRS and Italian GAAP, corporate tax (IRES) and regional tax (IRAP) are recorded in "income tax expenses" and, hence, expected to be Covered Taxes. The same should be applicable to cross-border withholding taxes on dividends, interest, and royalties.

The Draft Decree provides, among others, the definition of Qualified Refundable Tax Credit and Marketable Transferable Tax Credit.

No official characterization of Italian Tax Credit has been provided yet.

The Draft Decree (see Art. 32.3) provides for a secondary regulation, to be issued 90 days after the entry into force of the Decree, that shall rule on Safe Harbour (Regimi Semplificati).

The illustration that accompanies the draft Decree explains that such secondary regulation will rule both transitional and permanent Safe Harbour.

The draft Decree does not provide the exact scheduling of filings and payments (that are expected to be determined in line with the timeline provided for by the Directive).

In addition to the GIR, the draft Decree mentions specific Italian tax returns related to the QDMTT, IIR and UTPR to be filed by CEs located in Italy.

It provides that the payment is to be performed at the same time of the filing of such specific tax return.

On 27 October 2023, the Lithuanian Ministry of Finance submitted the draft law on ensuring the minimum level of taxation for multinational enterprise groups (i.e., law to transpose EU global minimum tax Directive) for coordination with the public.

As presented in the meeting held on 7 September 2023, the Ministry of Finance plans to postpone the implementation of the Pillar Two rules by 6 years, reasoning that: (i) the number of MNEs headquartered in Lithuania, falling within the scope of the EU global minimum tax Directive will not exceed 5; (ii) postponement could provide legal certainty, (iii) postponement could reduce the risk of a disproportionate tax administration burden.

Article 50 of global minimum tax Directive (2022/2523 of 14 December 2022) allows member states that have 12 or fewer UPEs of in-scope MNE groups to hold off on applying the IIR and UTPR for six consecutive fiscal years starting on December 31.

On 4. August 2023, the Luxembourg draft law to implement the global minimum tax was released (n°8292, hereafter “the draft law”). The draft law would transpose 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 Union, known as the EU Pillar Two Directive or the GloBE Directive (Global anti-Base Erosion Directive).

The draft law closely follows the EU Pillar Two Directive and the Transitional Safe Harbour Rules issued by the OECD in December 2022. On 13 November 2023, the Luxembourg Government released amendments to the draft law. The amendments mainly deal with the inclusion of the Administrative Guidance which was released by the OECD in February and July 2023.

The draft law will be reviewed by the Luxembourg Council of State and relevant industry organizations may share comments on the content of the draft law. While the draft law may still be subject to certain changes and clarifications, we would expect that the text of the law would remain close to the EU Pillar Two Directive.

The Pillar Two Rules have entered into force in the Netherlands on 31 December 2023. The legislative proposal of the Netherlands to transpose Pillar Two into the Dutch company tax system entitled Minimum Tax Act 2024 proposal was adopted by the Senate on 19 December 2023 and with that the new legislation has been substantively enacted as of that date.

The Portuguese Government announced the goal to rapidly implement Pillars One and Two, in an harmonized manner. The purpose is to foster, within the European Union legislative framework, the implementation of OECD's global agreement. This announcement is part of the Major Planning Options for the years 2023-2026, included in one of the strategic goals which is fighting inequalities, specifically in terms of income and tax justice. The draft document (Decree 57/XV) that includes these plans was recently released.

On 8 December 2023, Parliament approved the Act on the top-up tax for ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups with effectiveness from 31 December 2023.

This law transposes Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups. The act reflects comments raised during the commentary process, including the extension of the deadline for submitting a tax return for the top-up tax and the submission of a notification with information for determining the top-up tax up to 15 months from the end of the tax period, specifying the effectiveness of the law for tax periods starting after 31 December 2023, the option to calculate eligible income or an eligible loss from profit or loss reported in individual financial statements under the Slovak Accounting Act.

The initial Pillar legislative draft was presented in the Parliament in November. Since then, a number of revisions/amendments were made. The final version of the law was approved on 14 December 2023 and is pending to be published in the Official Gazette. This version differs significantly from the initial legislative draft.

Slovenia has to implement the Pillar Two rules in line with the Council Directive (EU) 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 Union.

In December 20th 2023 the draft bill intended to transpose the EU Council Directive 2022/2523 has been released. As of today, the draft bill is under the public information process through which amendments can be introduced before the approval of the Spanish Parliament.

The draft bill aligns with the guidelines outlined in Pilar 2 of the OECD initiative and aims to bring the Spanish legal framework in line with the international standards in this regard, contemplating a complementary tax for those multinational and national business groups operating in Spain.

It should be noted that, in line with the power contemplated in the Directive to allow Member States to choose to apply an admissible national complementary tax (QDMTT), Spain, making use of said power, establishes a national complementary tax whose main purpose is to guarantee, in any case, that the complementary tax that corresponds to the constituent entities of the large multinational or national group, which are located in Spanish territory, and that do not reach a minimum taxation of 15 percent, in Spanish territory, is required. by the Spanish Tax Administration.

It is important to highlight that the QDMTT is compatible with the minimum rate of 15% established in domestic legislation that came into force in 2022.

Upon approval, the draft bill would have retroactive effect for groups starting their fiscal year as of December 31, 2023, except with regard to the UTPR, which will take effect for tax periods starting as of December 31, 2024.

After the positive public vote result on the BEPS 2.0 project in June 2023 that allows for the necessary constitutional change as basis for the implementation of the Pillar 2 rules in Switzerland, the public consultation process with respect to the draft legislation (ordinance) on Pillar 2 ended on 14 September 2023.

The Swiss authorities will now review and consolidate the various inputs received and will then prepare an updated and final ordinance. It is currently expected that this final ordinance might be published in December 2023. Planned effective date for the rules is 1 January 2024 (for QDMTT and IIR - with the UTPR being delayed at least one year) but the Federal Council will continue to monitor the international developments to finally decide on this.

Legislation was enacted in the UK on 11 July 2023 which introduced an Income Inclusion Rule (IIR), known locally as the “multinational top-up tax”, and domestic minimum top-up tax (DTT), as part of Finance (No 2) Act 2023.

Both the UK IIR and the UK DTT apply for accounting periods beginning on or after 31 December 2023.

On 18 July the UK government published proposals for a number of amendments to the UK’s Pillar Two rules for inclusion in Finance Bill 2024. These include measures to implement an Under Taxed Profits Rule (UTPR) in the UK. The draft provisions do not include a commencement date and will not take effect until they have been included in a Finance Bill, but (as previously indicated) HMRC has confirmed that the commencement date will not be earlier than accounting periods beginning on or after 31 December 2024.