According to the statement of Fabian Picardo, Prime Minister, Gibraltar is on the way to implementing a new corporate tax regime within the scope of Pillar Two, proposed by the OECD, and an additional minimum tax, due to the Budget Bill for 2023-24.
1. Background
The Pillar Two standards ensure that large multinational companies pay a minimum level of taxes on income generated in each of the jurisdictions they operate in.
The tax rules provide for a coordinated tax system that levies a supplementary tax on profits from a jurisdiction if the effective tax rate, determined on a jurisdictional basis, is lower than the minimum rate set at 15%.
2. Significant Amendment
The harmonization of a global minimum tax rate under the OECD’s Pillar Two initiative is an essential and significant innovation for the international tax area.
Therefore, the government emphasized its commitment to implement a national regime compliant with the objectives of the Pillar Two initiative. The government will ensure that the national implementation of the global minimum tax rules considers the recommendations and viewpoints of key stakeholders.
3. Difficulties
International implementation of Pillar Two is not uniform. Jurisdictions seek to implement national regimes most suited to their circumstances.
Therefore, Gibraltar’s implementation will be effective from accounting periods beginning on or after December 31, 2024.
Source: Transferpricingnews.com 20/07/23
