ACD has highlighted European Commission guidance confirming that all EU Member States must treat Cyprus as having a qualified Income Inclusion Rule (IIR) under the EU Pillar Two Directive, despite its absence from the OECD Central Record.
The Luxembourg Administration of Direct Tax (ACD) issued a statement on 26 June 2026 concerning the Frequently Asked Questions (FAQ) published by the European Commission on 29 May 2026. The FAQ clarifies that, under the EU Pillar Two Directive, all EU Member States must treat Cyprus as having a qualified Income Inclusion Rule (IIR), even though it does not yet appear on the OECD Central Record of legislation granted transitional qualified status or the OECD document Global Minimum Tax: Support for Central GloBE Information Return Filing and Exchange (2024 Reporting Fiscal Year).
Question:
The Income Inclusion Rules implemented by Cyprus do not currently appear on the OECD Central Record of legislation granted transitional qualified status or on the OECD document Global Minimum Tax: Support for Central GloBE Information Return Filing and Exchange (2024 Reporting Fiscal Year). In light of this, how should those rules be treated within the EU for fiscal years for which filing is due before Cyprus appears on the OECD Central Record of legislation?
Answer:
For the purposes of and in accordance with the Pillar Two Directive, the qualified status of the Cypriot IIR is directly derived from Article 3(18) of the Directive for fiscal years commencing on or after 31 December 2023. Accordingly, all EU Member States should treat Cyprus as having a qualified IIR in effect. Cyprus has been able to receive top-up tax information returns since 31 May 2026 and is committed and required under EU law to exchange the information with other Member States under DAC9 in time for the first exchange deadline. If an MNE opts to file its top-up tax information return centrally in Cyprus, other Member States should not require a separate domestic filing in line with DAC9.
Earlier, Luxembourg’s Administration of Direct Contributions (ACD), on 17 June 2026, published a Frequently Asked Questions (FAQ) document providing further guidance on the implementation of the Pillar Two Law of 22 December 2023 on minimum effective taxation.
