On 20 March 2023, the Federal Ministry of Finance in Germany, published a discussion draft for a law implementing the Pillar 2 Directive to ensure a global minimum taxation for multinational enterprise groups and large domestic groups in the European Union (Minimum Taxation Directive Implementation Act – MinBestRL-UmsG).
The implementation of the global minimum taxation takes place in the form of the Minimum Tax Act (MinStG), which comprises a total of 11 paragraphs in 89 parts. The MinStG is to apply to financial years from 2024.
The supplementary tax regulations contained in the discussion draft are intended to ensure a global effective minimum taxation and to counteract harmful tax competition and aggressive tax arrangements. The aim is to promote tax justice and contribute to a more level playing field. The discussion draft takes into account both the Global Anti-Base Erosion Model Rules (“GloBE Rules“) developed by the Inclusive Framework on BEPS and the associated commentary as well as the Safe Harbour regulations.
Read more about the background and implications for companies in an article provided by German Taxand member firm Flick Gocke Schaumburg here.