Seminar on Global Minimum Taxation

On Monday, 8 April 2024, a mini-seminar for CzechInvest managers was held on the topic of BEPS 2.0 - Pillar 2 Global Minimum Taxation. Experts from EY - Karel Hronek and Martin Hladký, whom we would like to thank, spoke about the issue.

The introduction of a global minimum tax is a concept initiated by the OECD and refers to an agreement between countries to set a minimum effective corporate tax rate of 15% for multinational groups of companies with a consolidated turnover of more than EUR 750 million. The aim is to increase transparency and fairness in the international tax system and to prevent tax evasion and tax havens. The Czech Republic is among the majority of EU countries that have introduced Pillar 2, effective from the beginning of 2024.
During the training, the participants learned about the basic principles and rules for calculating and balancing tax within parent and subsidiary companies operating in different jurisdictions, the method of calculating the effective tax rate and the transitional safe harbour rules for the next three years.
In the Czech Republic, a relatively small number of companies could be affected by the obligation to pay the top-up tax. The positive news is that the introduction of a global tax would in many cases not necessarily have a significant impact on the recipients of investment incentives. However, given the complexity of calculating the effective tax rate and the existence of a number of rules and exemptions, we recommend that the specific impacts are always assessed on an individual basis, including the economic situation of the relevant recipient of the investment incentive and the nature of the investment supported.