After an extended and often troubled development, the OECD’s new ‘global minimum tax’ is at last coming to fruition. With adoptees including South Korea and Japan, and the Council of the European Union in addition to the UK government announcing plans to follow suit by the end of 2023, the prospect of Pillar Two, long seen as distant and perhaps uncertain, is now ever more tangible.
In brief, the aim of the new framework is to avoid a race-to-the bottom in international tax rates, closing residency loopholes in the tax system. This is to be achieved by ensuring that all jurisdictions implement a global minimum tax rate of 15% for corporations generating above €750m in revenue.
