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Multilateral Convention to Facilitate the Implementation of Pillar Two’s Subject to Tax Rule opens for signature and Minimum Tax Implementation Handbook is released

In brief

On 3 October 2023, the OECD published the Multilateral Convention (MLC) to Facilitate the Implementation of Pillar Two’s Subject to Tax Rule (STTR). As a reminder, the STTR is an integral part of the Pillar Two package, which consists of domestic rules (the GloBE rules) and a treaty-based rule, the STTR. One of the key differences compared to the GloBE rules is that the STTR is not limited to MNE groups with a consolidated turnover exceeding the EUR 750 million threshold. 

The STTR is defined as a treaty-based rule that applies to certain intra-group payments, such as interest, royalties and a specified list of other payments (“Covered Income“), including practically all intra-group service payments made from source states to the payee’s state. The STTR kicks in when such a payment is subject to a nominal tax rate below 9% in the latter State. For a more detailed analysis of the STTR, we refer you to our 31 July 2023 client alert here.

On 11 October 2023, the OECD released the Minimum Tax Implementation Handbook. The aim of this handbook is to provide an overview of the key provisions of the Pillar Two rules and the considerations to be taken into account by tax policy and tax administration officials and other stakeholders in assessing the implementation of Pillar Two.  

Click here to read the full alert.


Mounia Benabdallah is a principal in Baker McKenzie’s International Tax Practice Group. She joined Baker McKenzie in 2006 and has practiced in the Firm’s offices in Amsterdam, Chicago and New York. As an attorney at law she is admitted to the Netherlands Bar. Mounia is repeatedly recognized as leading advisor in ITR’s Women in Tax Leaders guide. Because of her strong US focus, Mounia is based in New York and member of the Global Reorganizations Practice Group. Mounia mainly advises US multinationals on the interplay between US international tax law, European tax law and Netherlands tax law in global restructuring projects, with a strong focus on global (OECD BEPS) and European tax policy developments.


Pablo Fernandez is an Associate in baker McKenzie, Barcelona office.

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