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Chamber Members Briefed on Pillar 2 GloBE Rules: Global Minimum Tax | June 2024

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12 June 2024

On 12th June 2024, we hosted an insightful session with David Parsons, Deputy Assessor at the Income Tax Division, who provided an overview of the Pillar 2 GloBE rules and the implications of the Global Minimum Tax.

Key Points Discussed:

  • Global Minimum Tax: Set at 15% for groups with revenue exceeding €750 million
  • Jurisdictional Basis: Effective for accounting periods starting on or after 31 December 2023
  • Tax Allocation Mechanism: Should a jurisdiction with low-taxed profits fail to impose the tax, another jurisdiction will do so through the GloBE rules
  • Isle of Man’s Approach: Introduction of a Qualified Domestic Minimum Top-up Tax (QDMTT) from 2025

Important Announcements:

  • The Isle of Man will implement the QDMTT starting from accounting periods commencing on or after 1 January 2025
  • Decision on the Income Inclusion Rule has been delayed, with minimal expected impact
  • No current plans to implement the Under Taxed Payments Rule (UTPR)

Actions for Impacted Businesses:

  • Engage with Group Tax and Finance departments to understand the group’s position
  • Communicate with the Income Tax Division regarding the drafting legislation, especially if there are specific or unusual circumstances
  • Prepare for new registration requirements and future QDMTT return filing obligations

Next Steps:

  • Drafting of legislation is underway
  • Continued informal engagement with the industry to discuss details
  • Legislation to be presented to Tynwald in Autumn 2024
  • Registration process to begin early to mid-2025
  • The Department for Enterprise (DfE) is actively working on incentives within the Pillar 2 framework

Click here to view the full slide deck. 

 

This briefing ensures that our members are well-prepared for the impending changes in the global tax landscape. We thank David Parsons for his comprehensive overview and look forward to continued engagement on this important topic.