What is the OECD Pillar Two global minimum tax?

A 15% minimum effective tax rate on corporate profits of multinational groups with global revenues above 750 million EUR. Applies jurisdiction-by-jurisdiction. If a jurisdiction charges less than 15%, a top-up tax is collected.

Who collects the top-up tax?

Primary rule: Income Inclusion Rule (IIR) — the parent company jurisdiction collects top-up tax. Backstop: Undertaxed Profits Rule (UTPR) allows other jurisdictions to collect if IIR not applied. Countries can also implement a QDMTT to collect domestically.

Qualified Domestic Minimum Top-up Tax: a domestic minimum tax designed to collect the difference up to 15% in the low-tax jurisdiction itself, before other countries can claim it under IIR or UTPR.

How is the effective tax rate calculated under GloBE?

ETR = adjusted covered taxes divided by GloBE income. Covered taxes and income are adjusted from financial accounting using specific GloBE rules. ETR calculated per jurisdiction, not globally.

How does Pillar Two affect Ireland?

Ireland (12.5% corporate rate) must apply a QDMTT to collect the difference between 12.5% and 15% for qualifying MNEs. Ireland implemented the QDMTT from January 1, 2024.

EU OECD Pillar Two 15% Global Minimum Tax Calculator

Calculate OECD Pillar Two global minimum tax (GloBE rules). 15% minimum effective tax rate for MNEs with revenue above 750m EUR. Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR). EU Directive effective 2024.

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Frequently Asked Questions

What is the OECD Pillar Two global minimum tax?

Who collects the top-up tax?

What is a QDMTT?

How is the effective tax rate calculated under GloBE?

How does Pillar Two affect Ireland?