BDO Corporate Tax News

• Australia: Draft guidance sets out the approach of the Australian Taxation Office (ATO) approach to enforcing penalties relating to filing obligations for the minimum tax during a “transition period.” Once finalised, the guidance will apply retroactively as from 1 January 2024 to filings relating to fiscal years starting on or before 31 December 2026 and ending on or before 30 June 2028 (the transition period). The ATO has also updated its website to include more details on the Pillar Two legislation.
• Austria: The Ministry of Finance has published FAQs on the application of the Pillar Two legislation, which addresses the scope of application, safe harbours, transitional provisions and entry into force.
• Bahamas: The government is considering a bill that would grant financial incentives to encourage investment activities that contribute to the economic welfare of the Bahamas and enhance its global competitiveness. The proposed measures are expected to meet the requirements of refundable tax credits in line with the OECD/G20 Pillar Two rules.
• Bermuda: A consultation was held on proposed changes to the Corporate Income Tax Act to align the legislation more closely with the OECD GloBE rules and incorporate updates reflecting OECD administrative guidance issued after the 2023 statute was enacted.
• Bahrain: The tax authorities have published a manual for CEs to use when making advance payments of the DMTT and the Minister of Finance and National Economy has established a tax objections committee for the DMTT law that is charged with overseeing DMTT-related objections and ensuring fair application of the rules.
• Belgium: The Belgian Constitutional Court has referred a case to the Court of Justice of the European Union on the compatibility of the UTPR under the EU Minimum Tax Directive with EU fundamental rights and freedoms.
• Bulgaria: Amendments to the Corporate Income Tax Act implement the transitional UPTR safe harbour as provided in the OECD’s July 2023 guidance, introduce rules for the QDMTT during the final tax period of companies in liquidation, insolvency, etc. and exclude sovereign wealth funds from the definition of a UPE.
• Czech Republic: The senate has approved a bill that amends the legislation to incorporate the OECD administrative guidance and extend the deadlines for filing the domestic top-up tax and information returns. The bill still must be signed by the president and published in the official gazette before it can become effective.
• Germany: The Ministry of Finance has released a revised bill, which represents the efforts of prior consultations and would further amend the Minimum Taxation Directive Transposition Act. The proposed changes include incorporating the OECD guidance from Jan 2025 into German law, addressing deferred tax liabilities and adjusting the transitional CbCCR safe harbour.
• Hong Kong: Pillar Two legislation was enacted, with an IIR and domestic minimum top-up tax applying for fiscal years starting on or after 1 January 2025. A UTPR will be introduced at a later date.
• Ireland: The tax authorities have updated guidance on Pillar Two.
• Italy: The government has approved the notification form for covered MNE groups to inform the tax authorities of their intention to delegate another group company to file the GIR.
• Korea: A QDMTT is included in the 2025 tax law amendments proposal released on 31 July 2025.
• Kuwait: The Ministry of Finance has announced the launch of an electronic registration service for in-scope companies and issued Executive Regulations that set out registration and filing requirements, the safe harbour and simplification rules, administrative penalties and how Kuwait's DMTT interacts with the QDMTT under global Pillar Two rules (see article in this issue).
• Liechtenstein: The tax authorities have extended the deadline to submit the first Liechtenstein QDMTT/IIR return from 31 December 2025 to 30 June 2026 and the deadline to register in Liechtenstein from 30 June 2025 to 31 December 2025 (see article in this issue).
• Luxembourg: The Council of Ministers have adopted a draft Grand-Ducal regulation to implement a standard template for the Pillar Two information return.
• Mauritius: The prime minister announced on 5 June 2025 that as part of the 2025-2026 budget a QDMTT will be introduced that on subsidiaries and holding companies of MNEs resident in Mauritius on income derived as from 1 July 2025 where their ETR is less than 15%. The government intends to have consultations with stakeholders to discuss potential exclusions and incentives for covered companies (see article in this issue).
• Romania: The tax authorities have published the notification form that is to be used to declare and pay the additional top-up tax.
• Switzerland: The Federal Tax Administration (FTA) released guidance on 24 July 2025, which clarifies that MNE businesses must take into account Swiss withholding taxes on distributions to owners when calculating QDMTT liability. However, any foreign taxes paid on such distributions are not considered covered taxes.

The FTA has clarified that section of the OECD’s GloBE rules on the allocation or reallocation of taxes on distributions is not applicable to Switzerland’s QDMTT.

• United Kingdom: HMRC is reviewing responses to the Pillar Two consultation and it has indicated that the Pillar Two guidance will be updated. Draft legislation has been released that would align UK Pillar Two legislation with the OECD's January 2025 administrative guidance and a notice released in July adds Spain and Guernsey to the list of Pillar Two territories that have qualifying IIRs and domestic top-up taxes (see article in this issue).