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General information about Pillar Two

Pillar Two is about a new top-up tax for large-scale corporate groups. The top-up tax aims to ensure that at least a minimum tax rate is applied around the world. With the new tax, the tax level of low-taxed constituent entities will be raised to 15%. The top-up tax is imposed either on

  • the parent entity based on the Income Inclusion rule (IIR), or
  • other constituent entities based on the Undertaxed Profits rule (UTPR).

In addition, the Pillar Two rules also provide for the introduction of a domestic top-up tax (QDMTT rule), which is one way of collecting the top-up tax.

Corporations affected by Pillar Two

The Pillar Two rules apply to multinational groups whose consolidated turnover exceeds €750 million during at least two of the last four accounting periods. Within the EU, the rules also apply to groups whose turnover exceeds the threshold in their home country.


Changes to Pillar Two are implemented in the EU through Council Directive (EU) 2022/2523, which must be implemented into national legislation by 31 December 2023. The provisions are applied to accounting periods beginning on or after 31 December 2023. 

The provisions will be applied for the first time for tax year 2024. Under the transitional provisions, a return must be filed for the first time within 18 months from the end of the accounting period, so groups whose accounting period is the calendar year will file their first returns by the end of June 2026. 

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Page last updated 2/28/2024