Germany: Council of the EU reaches agreement on global minimum taxation (Pillar Two)

15 December 2022 saw the Council of the European Union reach its unanimous agreement on the “Council Directive on ensuring a global minimum level of taxation for multinational and large-scale domestic groups” in a written procedure. The unanimous agreement is necessary for the adoption of the directive on an EU level. Until recently, Hungary refused to grant consent and Poland again questioned its consent to the Directive. The formal adoption by the Council of the EU means that all 27 member states of the EU must implement the Pillar Two rules into domestic legislation during 2023 and apply the rules from 2024 onwards. The rules outlined in the Directive are in line with the OECD Model Rules on Pillar Two published in December 2021 and are only slightly amended to the EU legal framework.

Before the adoption of the Council Directive, Germany has already begun to draft the national implementation law of Pillar Two. Thus, we expect the German draft implementation law to be published in the coming months.

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