Magazine: Introducing a global minimum tax

Guest writer:
Dr. Bálint Gombkötő 
lawyer
PwC Magyarország

In December 2021 OECD published its recommendations for Pillar 2 – introducing a global minimum corporate tax rate set at 15%. Some countries use low tax rates (tax advantage) to motivate businesses for moving their profits there. OECD believes this is harmful tax competition, and the solution to the problem can be the introduction of the global minimum corporate tax rate. So far 137 countries have said yes to this proposal, and currently the new regulation is being introduced in these states.

Guest writer:
Dr. Gergő Szimler 
lawyer
Réti, Várszegi és Társai
Ügyvédi Iroda

OECD calls the new regulation Global Anti-Base Erosion (GloBE) rules. The main rule is the so-called ‘income inclusion rule’, which says that the parent company must pay a tax on the tax advantage of any company belonging to the group. An alternative of this is the ‘domestic top-up tax’ – if the tax burden in a given country stays below the required minimum, the difference must be paid in accordance with the regulations introduced by the state where the tax rate is lower. The OECD and the EU calculate with the recommendations entering into force on 1 January 2023. //