The discipline of the Global Minimum Tax, Introduction between regulatory and transitional regimes
On October 11, 2024, the Implementing Decree of the MEF (Ministry of Economy and Finance) was published, regulating the Substance -Based Income Exclusion (Sbie) reduction from substantial economic activity within the framework of the Global Minimum tax – GMT (global minimum tax) regulations.
The aforementioned decree was issued in implementation of Article 35 of Legislative Decree No. 209/2023 and takes into account the clarifications provided in the Administrative Guidance Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosioin Model Rules (Pillar Two), approved by the Inclusive Framework on BEPS on July 13, 2023. This is an important additional piece added to the domestic regulatory framework on GMT.
Italy introduced the Global Minimum Tax with Legislative Decree No. 209 of Dec. 27, 2023, issued in implementation of Law No. 111 of Aug. 9, 2023, thus transposing the regulations introduced at the European level through EU Council Directive 2022/2523 of Dec. 14, 2022, issued on the basis of the principles and rules developed by the OECD. In short, a global minimum taxation regime is introduced, effective January 1, 2024, applicable to all companies located in Italy that are part of a multinational or domestic group that generates annual revenues of 750 million euros or more in at least two of the last four fiscal years preceding the reference fiscal year. The minimum level of taxation required by the legislation is achieved through the application of a supplementary tax in the event that the effective tax rate in each jurisdiction does not reach 15%.
The publication of the decree provides an opportunity to outline the main features of the GMT regulations, in light of the recent changes and the transitional regimes provided by the legislation, the content of which will be discussed in detail in future newsletters. In particular:
- The second newsletter will provide a general overview of the discipline, with a focus on the scope and effective date of GMT;
- In the third one, the rules for the calculation of the effective tax rate (ETR) and for the calculation of the supplementary taxation will be highlighted; in this context, the methods of calculating the Sbie will also be analyzed;
- Finally, in the fourth newsletter, the rules for simplified transitional regimes will be discussed and the main administrative requirements related to the global minimum taxation will be analyzed.
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