Pillar 2 Global Minimum Tax Implementation
The implementation of the Pillar 2 global minimum tax continued as key countries moved forward on enacting the rules. Examples include:
- Norway published the Supplementary Tax Act to provide for the IIR and domestic top-up tax
- Spain finalizing legislation for IIR, UTPR, and QDMTT
- Greece presented draft legislation for Pillar 2 rules
Tax Amnesty Programmes
Countries offered tax amnesties, relieving interest and penalties for outstanding taxes settled, in order to provide economic relief. Examples include:
- Saint Lucia reminder of tax amnesty expiring 1 May 2024
- Dominican Republic updated rules for amnesty through 1 March 2024
Updated Guidance from Tax Authorities
Tax authorities published guidance on new rules or procedures across several areas. Examples include:
- Irish Revenue updated guidance on interest limitation rule
- Kenya reminder on pre-filled VAT returns from January 2024
- Singapore updated CRS guidance
Tax Agreement Updates
Countries continued to expand their tax agreement networks through new agreements and amendments. Examples include:
- Andorra ratified pending treaty with Iceland
- Czech Republic ratified pending treaty with Sri Lanka
- EU recommendation to amend tax information exchange agreements
Tax Rate and Threshold Changes
Rates and thresholds saw changes, including VAT and reduced rates/regimes for small taxpayers. Examples include:
- Poland published 2024 rates and thresholds
- Turkey set monthly social security limits for 2024
Insights:
As we progress further into 2024, several notable trends emerge in the tax world. The implementation of the historic Pillar 2 global minimum tax continues at pace across developed and developing countries alike. We can expect to see the rules come into force in additional jurisdictions over 2023, re-shaping international tax frameworks.
In tandem, countries continue to offer tax amnesties, provide updated guidance, and expand tax agreements. Tax authorities seem responsive to economic challenges, willing to forgive penalties and simplify rules, whilst also implementing more robust reporting requirements. The expansion of information sharing networks also presses on steadily.
However, risks of fragmentation remain with instances of treaty terminations that could prompt retaliation. We also see reversals emerge like Nigeria postponing aspects of its VAT rules for non-resident digital service providers. As always, the tax world evolves in unpredictable ways.
Nonetheless, the overwhelming tendency seems to be a forward march of transparency and cooperation alongside digitization. Pre-populated tax returns and more automated approaches are coming into practical effect. We can expect technology to play an increasing role in facilitating not just reporting obligations but also compliance. Tax authorities that harness innovations early may gain advantages over peers.
Yet some constant challenges persist such as the treatment of cross-border remote workers that numerous double tax treaties grapple with. Thresholds for various special regimes and exemptions also continue to shift according to inflation and economic vagaries.
