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Luxembourg

CMS Expert Guide to Mastering OECD's Pillar Two in Luxembourg

Key stages in the introduction of global minimum taxation

Table of contents
  1. Has there been a formal indication of the intention to implement Pillar Two/GloBE rules?
  2.  What is the implementation status of Pillar Two/GloBE rules?
  3.  Have your tax authorities published guidelines commenting on Pillar Two/GloBE rules?
  4.  When will the Income Inclusion Rule (IIR) come into force?
  5.  When will the Undertaxed Payments Rule (UTPR) come into force? 
  6.  Is there any intention to implement a Qualifying Domestic Minimum Top-Up Tax (QDMTT)? If so, when?
  7. Further comments
Luxembourg
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1.Has there been a formal indication of the intention to implement Pillar Two/GloBE rules?

Yes.

2. What is the implementation status of Pillar Two/GloBE rules?

4 August 2023: in view of implementing EU directive 2022/2523 of 15 December 2022, Draft Bill 8292 was introduced before the Luxembourg Parliament.

3. Have your tax authorities published guidelines commenting on Pillar Two/GloBE rules?

Not yet and not prior to enactment of aforementioned Bill 8292.

4. When will the Income Inclusion Rule (IIR) come into force?

Fiscal years commencing on or after 31 December 2023.

5. When will the Undertaxed Payments Rule (UTPR) come into force? 

Fiscal years commencing on or after 31 December 2024.

6. Is there any intention to implement a Qualifying Domestic Minimum Top-Up Tax (QDMTT)? If so, when?

Fiscal years commencing on or after 31 December 2023.

7. Further comments

The Luxembourg bill, which closely follows the text of the EU Directive, implements the GloBE rules into a separate law (different from the Luxembourg income tax law). The bill introduces a domestic top-up tax. Considering the upcoming parliamentary elections (October 2023), it is anticipated that the legislative process for the adoption of the bill might be impacted notably if the Council of State requires some amendments. Nonetheless, the bill should be adopted this year, with a final vote expected late in 2023.