Technical guidance for implementation of the global minimum tax

by Ebba Perman Borg and Carina Raa


EU close up

On 2 February 2023, the OECD/G20 Inclusive Framework on BEPS released a detailed technical guidance to assist governments with implementation of the Pillar Two global anti-base erosion rules (the “GloBE Rules”). The GloBE Rules include global minimum tax rules designed to ensure that multinational businesses with consolidated group revenues exceeding EUR 750 million per year, will pay a minimum effective rate of tax of 15% on profits in all countries.

The guidance, named the Agreed Administrative Guidance for the Pillar Two GloBE Rules, aims to ensure co-ordinated outcomes and greater tax certainty when implementing the GloBE Rules into domestic law, either unilaterally, such as Norway, or jointly within the EU through the Minimum Tax Directive (2022/2523). Please see also our article on the Swedish implementation of the GloBE Rules, our newsletter on 8 February 2023 on the Swedish official report to implement the new Top-Up Tax Act, and our newsletter on 11 April 2022 regarding the EU Minimum Tax Directive (2022/2523).

The release of the OECD guidance, together with the release in December 2022 of the guidance on safe-harbours and penalty relief, the public consultation on the GloBE information return, and the public consultation on tax certainty for the GloBE Rules, finalises the implementation framework on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

The Inclusive Framework member jurisdictions, a group comprising of over 135 countries, shall apply the GloBE Rules consistent with administrative guidance, subject to any requirements of domestic law, and the administrative guidance is expected to play an important role in promoting certainty with respect to the GloBE Rules by clarifying the interpretation of the GloBE Rules and by providing guidance to tax administrations on how to apply the GloBE Rules.

The guidance covers a range of different topics, addressing questions that Inclusive Framework member jurisdictions have identified as most pressing. This includes general guidance on the scope, operation and transitional elements of the GloBE Rules. Also included is guidance on the design of domestic minimum taxes, known as Qualified Domestic Minimum Top-up Taxes, that Inclusive Framework member jurisdictions may choose to adopt.

The OECD guidance will be incorporated into a revised version of the commentary to be released later in 2023 and will replace the original version of the commentary issued in March 2022. Further administrative guidance will be considered and released on an ongoing basis, to ensure coordinated implementation.

Schjødt’s tax lawyers are closely following the development as the global minimum tax rules are implemented in the member jurisdictions and the OECD's further guidelines on coordinated implementation.

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