21 November 2024
Framework
On 8 November 2024, Law no. 41/2024 was published in the Official Gazette, transposing Directive (EU) 2022/2523 – the EU Minimum Tax Directive – into the domestic legislation.
Scope
These new rules apply to groups of multinational companies and large national groups, which are not considered excluded, and whose consolidated annual turnover is equal to or greater than 750 million euros.
What does this new regime mean?
This new regime, formally called the Global Minimum Tax Regime (RIMG):
- It is broadly aligned with the model rules developed under the OECD/G20 Inclusive Framework,
- It essentially includes three aspects:
a) The Income Inclusion Rule (IIR);
b) The Undertaxed Profits Rule (UTPR); and
c) The Portuguese complementary national qualified tax (ICNQ-PT).
- Considering the need to ensure a coherent and coordinated application of the RIMG, between Member States and at international level, the “Global Model Rules against Tax Base Erosion (Pillar Two)” are used. The Base Erosion (Pillar Two)’ (OECD model rules) should be taken into consideration, including the respective Commentaries and Administrative Guidance, as well as the safe harbour and reporting rules (GloBE Information Return -GIR) rules.
- Following the changes introduced to the IAS 12 accounting standard in May 2023, the entities covered will have to assess and reflect the potential impacts of this regime in the financial statements for the 2024 financial year.
In short, the RIMG introduces a new top-up tax when the effective tax rate of a covered group, in any of its jurisdictions, calculated according to the newly approved rules, is less than 15%.
Penalties
The law also provides for a penalty regime, which can be classified as a tax offence, which defines that:
i) Failure by an entity, even if on behalf of another entity, to submit any of the declarations provided for in the subparagraphs of Article 45(1), or submission after the legal deadline, when due, is punishable by a fine of between €5,000 and €100,000, plus 5 % for each day of delay in fulfilling this obligation.
ii) In the case of omissions and inaccuracies, a fine of €500 to €23,500 is also foreseen.
Entry into force and effects
This law came into force on 9 November 2024.
The law takes effect for tax years beginning on or after 1 January 2024, except for the UTPR rule, which generally applies to tax years beginning on or after 1 January 2025.
Our recommendation
Based on the above, we recommend that you analyze the implications of the RIMG within your Group, if you are covered.
We are, of course, at your disposal if you feel you need specialized support in this area.
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The above information is not intended to be an exhaustive analysis of all the changes to the current legal regime, but a selection of those that we believe to be the most relevant, and does not dispense with the consultation of our Company and/or diplomas to which they refer.
For more information contact: Catarina Breia (+351 91 7575 832 or cbreia@pt-nexia.com) from our Tax Department.
