Pillar Two
Pillar Two
The OECD’s Pillar Two framework aims to ensure that MNEs with global revenues exceeding EUR 750 million pay a minimum effective tax rate on income arising in each jurisdiction in which they operate. The framework imposes a top-up tax on profits arising in jurisdictions where the effective tax rate (ETR) is below 15%.
The core elements of Pillar Two are an income inclusion rule (IIR) and an Undertaxed Profits Rule (UTPR).
A country may also elect to implement a Qualified Domestic Minimum Top-up Tax (QDMTT). The timing of implementation for each element varies by territory.
The following chart summarises the implementation status of countries that are part of the OECD Inclusive Framework and that have agreed to adopt the global minimum tax and taken steps towards introducing the Pillar Two rules.
The core elements of Pillar Two are an income inclusion rule (IIR) and an Undertaxed Profits Rule (UTPR).
A country may also elect to implement a Qualified Domestic Minimum Top-up Tax (QDMTT). The timing of implementation for each element varies by territory.
The following chart summarises the implementation status of countries that are part of the OECD Inclusive Framework and that have agreed to adopt the global minimum tax and taken steps towards introducing the Pillar Two rules.
| Country | Enactment Status | IIR | UTPR | Comments |
| Kuwait | No announcement |
The government is discussing a proposal to introduce a 15% Business Profit Tax (BPT) on all legal entities operating in the country, largely driven by the impact of the implementation of the Pillar Two framework on Kuwait. Although the Ministry of Finance has not made a formal announcement regarding the BPT, during a parliamentary discussion, the ministry clarified that it is studying policy options for Kuwait to collect any taxes payable by Kuwait MNEs that fall within the scope of Pillar Two. BDO insights:https://www.bdo.global/en-gb/insights/tax/world-wide-tax/kuwait-15-business-profit-tax-proposed |