On 16 August 2023, the German government approved a proposed bill concerning the adoption of Council Directive (EU) 2022/2523, which aims to establish a universal minimum taxation standard for multinational enterprise (MNE) groups and sizeable domestic groups. This directive is commonly referred to as the “Pillar Two directive.” The version that received approval was made available on the Ministry of Finance website on 17 August 2023. The initial draft for discussion regarding the domestic implementation of the Pillar Two directive was released on 20 March 2023.
The next step for the draft law is to be submitted for approval by both the German Bundestag (the lower house of parliament) and the German Federal Council (the upper house of parliament, Bundesrat). After receiving approval and being officially published in the Official Gazette, the provisions of this law will typically take effect for fiscal years starting on or after 31 December 2023.
