On 30 August 2023, the Czech Ministry of Finance has released a statement regarding the introduction of a draft law to implement the Pillar 2 global minimum tax rule, in accordance with Council Directive (EU) 2022/2523 of 14 December 2022.
Key provisions of the draft law include the incorporation of the Pillar 2 income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) with the objective of establishing a minimum tax rate of 15% for multinational enterprise (MNE) groups that have annual consolidated revenue of at least EUR 750 million in a minimum of two out of the previous four fiscal years.
Furthermore, the proposal introduces a qualified domestic minimum top-up tax (QDMTT) for members of in-scope groups, described by the Ministry as a Czech compensatory tax. The government of the Czech Republic has given its approval to the draft law, set to take effect on 31 December 2023. It now awaits deliberation, approval by both parliamentary chambers, and the signature of the president.
