India prepares for Pillar Two implementation: Aiming for global tax harmony amidst complex challenges

Pillar Two of the OECD’s Inclusive Framework on Base Erosion and Profit Shifting aims to ensure that large multinational enterprises (MNEs) pay a minimum 15% tax rate globally. It requires MNEs to meet two conditions: being a multinational group and having global revenues of EUR 750 million or more. The framework includes mechanisms like the Income Inclusion Rule (IIR), Under-taxed Payment Rule (UTPR), and Qualified Domestic Minimum Top-up Tax (QDMTT) to collect top-up taxes. With over 27 countries implementing these rules from January 2024, India’s Revenue Authorities are studying how to integrate Pillar Two into domestic laws, focusing on data management and international cooperation.