Recent developments concerning the fiscal reform on the global minimum tax

On 4 October 2024, the Romanian Ministry of Public Finance has published the draft Law for ensuring a global minimum taxation level for multinational enterprises groups and large-scale domestic groups, together with the Justification Note.

We remind you that the draft Law considers Romania’s obligation to transpose the provisions of the EU Council Directive 2022/2523 regarding the fiscal reform concerning global minimum tax.

In line with the provisions of the Directive, Romania proposes to establish two main common measures for ensuring the minimum effective taxation of 15% for multinational and national groups of enterprises having an annual income of minumum EUR 750mil. recorded in at least two of the preceeding four financial exercises and specifically: the income inclusion rule (IIR) and respectively, the undertaxed profits rule (UTPR).

Moreover, the draft Law regulates also the establishment of a national additional tax which is to be determined at the level of the subsidiaries which are lower taxed in Romania, of the multinational and national enterprises groups that fall under the law.

The draft Law is expected to produce effects in respect of financial years starting 31 December 2023 (except for UTPR rule which should apply in respect of financial years starting 31 December 2024).

Important to note also that, on 11 October 2023, OECD has released the Implementation Handbook on the minimum tax rules. This Handbook provides an overview on the global minimum tax rules and on the considerations to be taken into account by tax officials when assessing the implementation options.