On 5 June, 2024, the Luxembourg Government Council approved a draft law to amend the Law of 22 December 2023. It introduces the Pillar Two income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) in alignment with the Council Directive (EU) 2022/2523 from 14 December, 2022.
The legislation concerns the effective minimum taxation for multinational enterprise groups and large national groups.
Having introduced a minimum effective tax floor of 15% for enterprise groups exceeding a consolidated turnover of EUR 750,000,000 into Luxembourg law, the Pillar Two Law is notably based on the agreement reached in October 2021 within the OECD Inclusive Framework on the effective minimum taxation of multinational enterprise groups.
