The amendment to the equalisation tax extends the CbCR safe harbour and introduces an exemption for tax reliefs

The CbCR safe harbour will remain in force for a further year

The draft amendment extends the transitional CbCR safe harbour by one year. Multinational groups will thus be able to continue to benefit from a simplified assessment of the equalisation tax based on a country-by-country report (CbCR).

The extension follows on from the agreement between OECD/G20 countries and is intended to give taxpayers more time to prepare for the full implementation of the standard global minimum tax rules.

New exemption for qualified tax incentives

The most significant change is the introduction of an exemption for so-called qualified tax incentives. These are tax benefits linked to real economic activity in a given country, such as investment, research and development, or manufacturing.

The aim of the new provisions is to prevent the use of such incentives from automatically reducing the effective tax rate and consequently leading to the imposition of a catch-up tax. Provided the statutory conditions are met, their value will be taken into account in a specific manner when calculating the effective tax rate.

Clearer rules on the winding-up of a company

The amendment also addresses the practical situation where a member of a multinational group ceases to exist without a legal successor and fails to fulfil its obligations under the law on the equalisation tax.

Under the new rules, it will be possible to authorise another member of the group to file a tax return, fulfil reporting obligations and pay the equalisation tax. If the group does not designate such an entity, the other members of the group or the ultimate parent entity will be responsible for fulfilling these obligations.

What does this mean for taxpayers?

Companies subject to the Pillar Two rules should assess whether the tax incentives they utilise may meet the conditions of the new regime for qualified tax incentives. In certain cases, this change may have a significant impact on the amount of the equalisation tax, whilst also increasing the attractiveness of existing investment and innovation incentives.

The proposed amendment is due to come into force on 30 December 2026 for the provisions extending the CbCR safe harbour, and on 31 December 2026 for the other provisions, including the new exemption for tax incentives and amendments to procedural rules.

If you need to assess the impact of the proposed changes on your group or arrange for the calculation of the adjustment tax and related filings, we would be happy to assist you.