First EU member state issues Pillar II draft legislation - Tax and Legal blog


On Monday 24 October 2022 the Netherlands published draft legislation, including commentary, relating to the domestic implementation of the global minimum tax (“Pillar II”). Essentially the draft legislation closely follows the OECD’s Pillar II Model Rules as well as the EU’s Pillar II directive proposal, containing the Income Inclusion Rule (“IIR”), Undertaxed Profits Rule (“UTPR”) and a Qualified Domestic Minimum Top-up Tax (“QDMTT”). It is expected that the IIR and QDMTT will come into effect for in-scope groups that have financial years starting on or after 31 December 2023. The draft legislation is open for public consultation until 5 December 2022.

An EU-wide agreement on the implementation of the global minimum tax remains uncertain given Hungary’s continued opposition to the global minimum tax. It is unclear at what point during the coming year the EU directive will be under consideration for voting in the Economic and Financial Affairs Council (“EcoFin”).

In response to Hungary’s veto in the EcoFin, last month the governments of Germany, France, Italy, Spain and the Netherlands jointly voiced their intention to continue progressing towards implementation of the global minimum tax in 2023 on a national level even if the EU continues to lack unanimity on the topic.

The move by the Netherlands in publishing draft legislation this week highlights their continued progress towards implementation. However, it should be noted that the Dutch draft legislation is designed under the assumption that the EU Directive will be issued.

The draft legislation also mentions the uncertainties impacting the implementation of Pillar II. However, the issuance allows for a consultative process to commence.

The Dutch draft legislation includes the adoption of the optional QDMTT, essentially ensuring that the low-taxed profits of Dutch entities within a group are first topped-up locally. This option prevents other jurisdictions from collecting taxes on the undertaxed Dutch profits.

The timeline for implementation of the IIR and QDMTT, with the UTPR taking effect a year later, corresponds to the latest timeline of the OECD.

The dominos begin to fall
The draft legislation confirms the intention of the Dutch government to implement the Pillar II rules which will come into effect for in-scope groups that have financial years starting on or after 31 December 2023. We now also look to the governments of Germany, France, Italy and Spain and their progress towards implementation of the global minimum tax.

Is your organization prepared?
As governments are continuing to gear up for legislation to take effect by 2024, multinationals (MNEs) are not left with much time to act and prepare their operations. The timeline for MNEs to assess and plan for these regulatory changes is continuing to shorten.

What steps has your organisation taken to meet the complexities and compliance burden of Pillar II?

If you would like to discuss more on this topic, please do reach out to our key contacts below.

Key contacts

Blog_Daniel stutzmann110x110

Daniel Stutzmann - Partner, Global Minimum Tax  

Daniel is a Tax Partner with more than 15 years of experience as an international corporate tax specialist. This includes a one year assignment in the US to lead the Swiss ICE Desk. Daniel has extensive experience in the area of cross-border structuring (like establishing tax efficient IP- and financing structures) as well as business reorganizations including large supply chain transformation projects. This also includes advising several multinationals in moving their worldwide/regional headquarters or central functions to Switzerland, while often establishing tax privileged Swiss principal companies. In his capacity as Swiss tax expert he has worked on a significant number of value chain alignment (“VCA”) projects, cross border restructuring and headquarter relocations.


Manuel Angehrn110x110

Manuel Angehrn - Senior Manager, Global Minimum Tax  

Manuel is a Senior Manager with over 10 years of experience in International Tax. He is a Deloitte Switzerland’s Global Minimum Tax subject matter expert. He follows domestic and global tax developments and assesses the impact to Swiss multinationals.



Gautam Agarwal - Senior Manager, Accounting Advisory Services

Gautam is a Senior Manager in our Corporate Assurance Services department and brings over 10 years of experience in accounting advisory. He is Deloitte Switzerland’s Pillar II accounting technical knowledge leader. He is responsible for the accounting impact assessment and governance.


Peluso Ryan-109-110-v3

Ryan Peluso - Assistant Manager, Global Minimum Tax

Ryan is an Assistant Manager with over 7 years of experience in International Tax. He supports in modelling the impact of Pillar II as well as developing and executing processes for its implementation. He is specialised in helping clients access, visualise and analyse their data for international tax reporting, compliance and planning processes.



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