Press release

Implementation of Pillar Two takes shape

17 November 2022

Alison Lobb, corporate tax partner at Deloitte, said: 

“The Chancellor confirmed that the implementation of an international global minimum tax regime – the OECD’s Pillar Two project – will go ahead in the UK from the start of 2024 for large businesses with annual revenues of €750 million or more. 

“UK headed groups will apply the rules to their overseas subsidiaries (an income inclusion rule) alongside a domestic rule to top-up tax on UK profits (a domestic minimum top-up tax) to a minimum rate of 15%. From 2025 at the earliest, the government will also introduce further rules to top-up taxes on profits in other low-tax countries (an undertaxed profits rule) which would otherwise remain outside the OECD-agreed global minimum tax rules. 

“A UK domestic minimum tax was widely anticipated as a consequence of the design of the global framework by the OECD. The government has chosen to introduce this from 2024, and to apply it to all large businesses operating in the UK, whether they are international or not. This will mean UK profits will be taxed at a minimum of 15%.

“The government estimates that by 2027-28 the changes will raise £2.3 billion a year, although there are uncertainties around what changes other countries might make to their own tax systems that would affect the outcome. 

“These changes are part of the wider approaches being introduced by the OECD under its ‘Two Pillar’ approach to international tax reform. Other countries, including Germany, France, Japan, South Korea, Spain, Italy and the Netherlands are expected to have similar rules in operation from 2024.”

 

 

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Deloitte spokespeople

Deloitte has a range of spokespeople available to comment on today’s Autumn Statement. They can be reached on 020 7007 3333 or 0207 303 5054 or one of the following numbers:

• Debapratim De - senior economist (07884 765916)

• Amanda Tickel - head of tax policy (07920 270 964)

• Rachel McEleney - personal tax (07826 891 752)

• Alison Lobb - corporate tax (07768 178264)

• James Warwick - employment tax (07855 399368/07436055437)

• Gareth Pritchard - indirect tax (07824895798)

• Gerry Biddle - business rates (07855 399 368)

 

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