AUSTRIA Trends and Developments Contributed by: Raphael Holzinger, Julia Hochreiter, Matthias Jancura and Claudia Synek, Grant Thornton Austria
a global minimum taxation system as a further measure against profit shifting and profit reduc - tion. To prevent these undesirable actions, the OECD/G20 Inclusive Framework on BEPS (base erosion and profit shifting) developed a two-pillar model, which was politically agreed by 136 tax jurisdictions in October 2021, whereby: • Pillar One concerns the redistribution of tax - ing rights of multinational enterprise groups; and • Pillar Two concerns the introduction of global minimum taxation for multinational enterprise groups. In December 2021, the OECD published the Global Anti-Base Erosion ( “GloBE” ) model rules (Pillar Two) developed in the OECD/G20 Inclusive Framework on BEPS. Based on the GloBE model rules, an EU Directive was adopted in December 2022 to ensure global minimum taxation for mul - tinational enterprise groups and large domestic groups in the EU. This directive was implement - ed at national level with the Minimum Taxation Act ( Mindestbesteuerungsgesetz , or MinBestG), which came into force on 31 December 2023. An ordinance of the Federal Minister of Finance on the temporary country-by-country report (CbCR) safe harbour was issued on 5 December 2024 (the “CbCR Safe Harbour Ordinance” ). In general, the rules apply to companies and permanent establishments of all groups (nation - al or multinational) with an annual turnover of more than EUR750 million (in a certain period of time). The main ratio behind the model rules is to ensure a global minimum effective taxation of 15% in each jurisdiction of a group. If the effec - tive tax burden is below 15%, a separate top-up tax will be levied in the amount of the difference between the global minimum tax rate of 15% and the lower effective tax rate.
Any potential top-up tax is levied either via the Qualified Domestic Minimum Top-Up Tax (QDMTT) ( Nationale Ergänzungssteuer , or NES), the Income Inclusion Rule (IIR) ( Primäre Ergän- zungssteuer , or PES) or the Undertaxed Profit Rule (UTPR) ( Sekundäre Ergänzungssteuer , or SES). For the purposes of the MinBestG, the mini - mum taxable profits of all domestic and foreign constituent entities of a group must be deter - mined on the basis of the net profit for the year under company law in accordance with the rel - evant accounting standard (generally, the group accounting standard of the ultimate parent com - pany), taking into account certain adjustments provided for in the GloBE model regulations for the GloBE income, as well as the adjusted cov - ered taxes. A country-specific effective tax rate must then be determined for all constituent entities of a group located in the same tax jurisdiction ( “juris- dictional blending” ). If this effective tax rate is below the minimum tax rate of 15%, a top-up tax is calculated for this tax jurisdiction. The affected group is obliged to submit a mini - mum tax report ( “GloBE Information Return” ). This must contain key information on the entire group and, in particular, information on the cal - culation of the effective tax rate and the top-up tax, as well as the options exercised. If the conditions for applying the safe harbour rules provided for in the MinBestG are met, the top-up tax for the tax jurisdiction concerned is reduced to zero. Furthermore, there is a tempo - rary exemption from SES for groups in the initial phase of their international activities.
48
CHAMBERS.COM
Powered by FlippingBook