Pillar 2

Pillar 2 introduces Model Rules that address the tax challenges of the digitalisation of the economy. They are designed to ensure that large multinational enterprises (MNEs) pay a minimum level of tax on the income arising in each jurisdiction where they operate. The rules target MNEs to ensure they are subject to a global minimum effective taxation rate of 15%. It is also essential to monitor the impact of the rules on investment fund structures.

Most measures began to apply from tax years beginning on or after 31 December 2023. Other measures will begin to apply from tax years beginning on or after 31 December 2024.

There are many challenges and opportunities under Pillar 2. First, it will be key to determine the scope and extent of application of the new rules, with a particular focus on the accounting consolidation requirements. Considering the high complexity and intricacies of the new rules, we strongly recommend talking to an Arendt tax lawyer to fully understand your situation and how it will impact your operations.

How can we help?

We can provide in-depth advice and practical solutions tailored to you:

• Identifying in-scope structures and defining compliance requirements
• Providing accounting opinions on consolidation requirements under Lux GAAP and IFRS
• Delivering tailored advice on strategic approaches
• Working with your teams (and external advisers) to prepare, review and file Pillar 2 returns
• Training and upskilling your staff on Pillar 2