Today, December 12, 2024, the Cyprus House of Representatives voted the Global Minimum Tax of MNE Groups and Large-Scale Domestic Groups Law (the “Law”), transposing into Cyprus national law the relevant EU Directive issued on December 14, 2022, on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups (the “Directive”). In order for the legislative process to be completed the Law will need to be published in the Government Gazette, which is expected imminently. The Directive itself was developed from the OECD/G20 Inclusive Framework on BEPS Pillar Two Model Rules (the “Model Rules”).
The Law aligns with the Directive, including additional text to cater for certain elements of the OECD/G20 Inclusive Framework on BEPS Administrative Guidance (the “AG”) that has been released to date.
The Law provides that the main rule named as the Qualified Income Inclusion Rule (“QIIR”) is practically effective as from 2024, the secondary rule named as the Qualified Undertaxed Profits Rule (“QUTPR”) is practically effective as from 2025, and the Cyprus domestic minimum top-up tax also practically effective as from 2025 (“DMTT”).
