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Trajan Shipley
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23rd December 2021
Banking & Finance Institutional law Tax

Minimum tax rate for multinationals: Commission proposes Directive to implement global tax agreement

The European Commission has proposed a Directive ensuring a minimum effective tax rate for the global activities of large multinationals, which seeks to implement the recent OECD/G20 Inclusive Framework on BEPS agreement on a Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

The new Directive would ensure that large multinationals are effectively subject to a 15% tax rate within the EU, thereby providing for rules on how to calculate this effective tax rate. Under such rules, if the minimum effective rate is not imposed by the country where a low-taxed company is based, there are provisions for the Member State of the parent company to apply a ‘top-up’ tax.

The proposed rules

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