The OECD’s pillar two model rules: what do we know now?

The OECD released the long-awaited pillar two 15% minimum effective tax rate model rules on 20 December just days before the release of a draft EU Directive on minimum taxes. As set out in the October 2021 statement by the OECD/G20 Inclusive Framework (IF) these model rules are the first of three expected sets of guidance: the model rules; an explanatory commentary (expected in January); and a more detailed implementation framework (expected in the middle of 2022 at the earliest). These model rules cover the income inclusion rule (IIR) and undertaxed payments rule (UTPR) collectively referred to as ‘GloBE’. More detail on the other part of pillar two the subject to tax rule (STTR) will not be made public until 2022. It has been reiterated that the aim is for pillar two to be brought into law in 2022 to be effective in 2023 ...