Assessment of equivalence
1. The legal framework implemented in the domestic law of a third-country jurisdiction shall be considered to be equivalent to a qualified IIR set out in Chapter II, and shall not be treated as a controlled foreign company tax regime, if it fulfils the following conditions:
(a)
it enforces a set of rules in accordance with which the parent entity of an MNE group shall compute and pay its allocable share of top-up tax in respect of the low-taxed constituent entities of the MNE group;
(b)
it establishes a minimum effective tax rate of at least 15 % below which a constituent entity is considered to be low-taxed;
(c)
for the purpose of computing the minimum effective tax rate, it only allows the blending of income of entities located within the same jurisdiction; and
(d)
for the purpose of computing a top-up tax under the equivalent qualified IIR, it provides for relief for any top-up tax that was paid in a Member State in application of the qualified IIR and for any qualified domestic top-up tax set out in this Directive.
2. The Commission is empowered to adopt delegated acts in accordance with Article 53, in order to determine the list of third-country jurisdictions that have implemented a legal framework in their domestic law which is considered to be equivalent to a qualified IIR in conformity with the conditions laid down in paragraph 1 of this Article, and to update that list as a result of a subsequent assessment of the legal framework implemented by a third-country jurisdiction in its domestic law.
Exercise of the delegation
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.
2. The power to adopt delegated acts referred to in Article 52 shall be conferred on the Commission for an indeterminate period of time from 23 December 2022.
3. The delegation of power referred to in Article 52 may be revoked at any time by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.
4. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.
5. As soon as it adopts a delegated act, the Commission shall notify it to the Council.
6. A delegated act adopted pursuant to Article 52 shall enter into force only if no objection has been expressed by the Council within a period of two months of notification of that act to the Council or if, before the expiry of that period, the Council has informed the Commission that it will not object. That period shall be extended by two months at the initiative of the Council.
Informing the European Parliament
The European Parliament shall be informed by the Commission of the adoption of delegated acts, of any objection formulated to them, and of the revocation of the delegation of powers by the Council.
Bilateral agreement on simplified reporting obligations
The Union may conclude agreements with third-country jurisdictions whose legal frameworks have been assessed as equivalent to a qualified IIR in accordance with Article 52, with a view to arranging a framework for simplifying the reporting procedures laid down in Article 44(6).
Transposition
Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2023. They shall immediately communicate the text of those measures to the Commission.
They shall apply those measures in respect of the fiscal years beginning from 31 December 2023.
However, with the exception of the arrangement provided for in Article 50(2), they shall apply the measures necessary to comply with Articles 12, 13 and 14 in respect of the fiscal years beginning from 31 December 2024.
When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
Review by the Commission of the implementation of Pillar One
The Commission shall, by 30 June 2023, submit a report to the Council assessing the situation regarding the implementation of Pillar One of the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy agreed by the OECD/G20 Inclusive Framework on BEPS on 8 October 2021 and, if appropriate, submit a legislative proposal to address those tax challenges in the absence of the implementation of the Pillar One solution.
Entry into force
This Directive shall enter into force on the day following that of its publication in the Official Journal of the European Union .
Addressees
This Directive is addressed to the Member States.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
