Austria: Nationalrat considers bill to implement Pillar 2 global minimum tax

On 24 November 2023, the Austrian lower house of parliament (Nationalrat) approved Bill No. 2322 dB for consideration to ensure Pillar 2 global minimum global taxation for multinational enterprise (MNE) groups and large domestic groups in the European Union. This bill marks a turning point in Austria’s approach to corporate taxation. It presents a three-part plan to tackle tax haven abuse:

  • National Supplementary Taxes (NES & PES): Starting 31 December 2023, companies exceeding a certain profit threshold will face an additional tax if their global effective tax rate falls below 15%. This aims to discourage shifting profits to low-tax jurisdictions.
  • Secondary Supplementary Tax (SES): Effective 31 December 2024, an additional tax will be levied on multinational groups that book excessive profits in Austria while funneling them elsewhere. This tackles the practice of “topping-up” profits in specific countries to benefit from lower tax rates.
  • Enhanced Tax Collection: The SES will be collected directly from the group’s ultimate parent company, ensuring accountability and preventing subsidiaries from acting as shields.

It is expected that the draft bill will be approved before the end of the year.

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