At the beginning of this year, Law 431/2003 on ensuring a global minimum level of taxation of multinational enterprise groups and large national groups (the Law) was adopted, which transposes the European Directive in this regard. The law refers to the implementation of the “Pillar 2” rules by introducing a minimum global income tax of 15%.
Pillar 2 represents one of the two pillars (‘Pillar 1’ and ‘Pillar 2’) of the BEPS (base erosion and profit shifting) action plan. Pillar 1 aims to revolutionize the existing principle of profit sharing (market value principle) for the digital economy. Pillar 2 aims to create a stable international tax system by preventing profit shifting and tax avoidance by multinational enterprises (MNEs). The aim is for MNCs to pay a minimum tax rate in the states where they are present to avoid shifting profits to so-called “tax havens”.
The implementation of level 2 could change the dynamics of MNCs, becoming an impetus, on the one hand, to revise certain group-wide agreements, and on the other hand, to introduce a reliable transfer pricing policy.
Read the rest of the article on the PwC Romania blog
The article is signed by Alaia Popa, senior manager and Darya Popa, senior consultant
Article supported by PwC Romania
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.