EU agreement on minimum taxation(Pillar 2)

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On 12 December 2022, the Council of the EU announced_ that EU Member States have reached agreement to implement a directive that ensures a global minimum level of taxation for multinational groups in the EU (“Pillar 2 directive”) and that a written procedure for its formal adoption will be launched.

The new rules aim to tax the profits of large multinational and domestic groups with a combined annual turnover of at least EUR 750 million based on consolidated financial statements at a minimum rate of 15%.


On 8 October 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting reached an agreement_ known as Pillar 2 on reform of the international rules on taxation of the profits of multinational enterprises.

On 20 December 2021, the OECD published final model rules for a global minimum tax (the Global Anti-Base Erosion Rules or “GloBE rules”), which aim to ensure that large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate, by imposing a top-up tax whenever the effective tax rate, determined on a jurisdictional basis, is below the minimum rate of 15%.

On 22 December 2021, building on the OECD GloBE rules, the EU Commission issued a proposal_ for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the EU, and expanding the scope of the rules to domestic groups.

To read our newsflash on the EU Pillar 2 proposal, click here_

Next steps

Once the EU has formally approved the Pillar 2 directive, Member States will have until 31 December 2023 to implement the new rules.

How can we help?

The Tax Law partners and your usual contacts at Arendt & Medernach are at your disposal to further assess and advise on the impact of the Pillar 2 directive on your operations.