On 3 October 2023, the OECD published the Multilateral Convention 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.

On 17 July 2023, the OECD/G20 Inclusive Framework on BEPS released a package of documents as part of its continuing effort to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy. On Pillar Two, this included further Administrative Guidance (including two new safe harbors) and the GLoBE Information Return, together with a report on the Subject to Tax Rule including a model treaty provision and accompanying commentary. We set out below our experts’ insights on these publications.

On 2 February 2023, the OECD/G20 Inclusive Framework on BEPS released technical guidance to assist governments in the local implementation of the Global Anti-Base Erosion Model Rules (“GloBE Rules”). This should help governments to correctly apply the GloBE Rules to large Multinational Enterprises from the start of 2024. Moreover, it aims to ensure a coordinated and harmonized implementation of the GloBE Rules. The Administrative Guidance takes the form of a modification to the original version of the Commentary that was issued in March 2022.

Exactly one year after publication of the Pillar 2 Model GloBE Rules on 20 December 2021, the OECD Inclusive Framework on BEPS published an implementation package as part of its ongoing efforts to develop the Pillar 2 Implementation Framework. The Pillar 2 documents released contain (i) guidance on Safe Harbours and Penalty Relief, and (ii) public consultations on the GLoBE Information Return and Tax Certainty for the GloBE Rules.