In its plenary session of 20 December 2023, the Chamber of Deputies adopted the bill on minimum effective taxation to transpose into national legislation Council Directive (EU) 2022/2523 of 15 December 2022 to ensure a worldwide minimum level of taxation for multinational enterprise groups and large domestic groups in the European Union.
This reform of international taxation, commonly known as Pillar Two, is designed to introduce a level playing field in terms of taxation between different jurisdictions. It works by establishing a tax base and a minimum tax rate of 15 per cent, common to the various jurisdictions implementing it. It will only be triggered when entities located in a jurisdiction, whether or not it has implemented the Pillar Two rules, have an effective tax rate below the minimum rate. The law will apply to entities that are part of a multinational enterprise group or a large national group and located in the Grand Duchy of Luxembourg.
Minister Roth said he was very pleased with the decision of the Chamber of Deputies to agree to this bill: "I would like to thank the Chamber of Deputies for passing this bill in record time. Transposing the directive into national law demonstrates Luxembourg's ongoing commitment to complying with agreed international and European tax standards. I would also like to reiterate the Government's commitment to strengthening the competitiveness of our economy and bringing the corporate tax rate closer to the average applicable in OECD countries in the medium term.”
Press release by the Ministry of Finance