The Ministry of Finance has prepared a harmonizing bill titled "Ensuring a Global Minimum Taxation Level for Multinational Corporation Groups and Large-Scale Domestic Groups within the Union - 2023 Law." This move aligns with the Directive 2022/2523 of the Council dated December 14, 2022, often referred to as Pillar 2.

According to a statement from the Ministry of Finance, the proposed legislation mandates the application of a series of rules. Notably, a minimum effective tax rate of 15% will be imposed on entities belonging to Multinational Corporation Groups or large-scale domestic groups with annual revenues exceeding €750 million.

Historically, the European Union has taken significant steps to combat aggressive tax planning within its internal market. Rules have been established to counteract the erosion of tax bases within the internal market and the shifting of profits outside of it. These rules have been adapted from recommendations made by the Organisation for Economic Co-operation and Development (OECD) as part of their initiative to counteract the erosion of the tax base and profit shifting. The ultimate goal is to ensure that the profits of multinational corporations are taxed where the economic activities that generate those profits take place and where value is created.

In a continuous effort to end tax practices that allow corporations to shift their profits to jurisdictions with zero or very low taxation, the OECD has further developed a set of international tax rules. These rules ensure that multinational corporations pay their fair share of taxes, regardless of where they operate. This significant reform aims to set a floor for competition concerning corporate income tax rates by introducing a global minimum taxation level. By eliminating many of the benefits of shifting profits to low or zero-tax jurisdictions, this reform will ensure a level playing field for businesses worldwide and enable jurisdictions to better protect their tax bases.

Furthermore, the Ministry of Finance, in collaboration with the Tax Department, has integrated all provisions of the European Directive into the draft legislation. It has been enriched with clauses that address procedural issues, resulting from the collaboration between the EU and its member states, clarifying the interpretation of the Directive's articles in conjunction with the corresponding global rules established by the OECD.