International Taxation

Luxembourg’s implementation of pillar two global minimum taxation

An analysis by ATOZ Tax Advisers, Taxand Luxembourg:

The Luxembourg government has published a draft law aligning with EU Directive 2022/2523 (pillar two), implementing global minimum taxation rules for multinational enterprises (MNEs) and large domestic groups to ensure that large internationally operating businesses pay a minimum level of tax regardless of where they are headquartered or the jurisdictions they operate in.

The law introduces a 15% minimum corporate tax rate, based on effective tax rate tests and standardized tax definitions, as well as establishing income inclusion and undertaxed payments rules, along with a qualified domestic top-up tax. These measures target entities with annual turnovers over EUR 750 million and has scheduled implementation for 2023 and 2024.

However, further guidance is needed to address specific Luxembourg-related aspects. Andreas Medler, Taxand Luxembourg member firm, ATOZ Tax Advisers, analyses this new legislation and its impact in Luxembourg.

Read the full analysis here.


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