Entry into force of the global minimum tax (Pillar 2)

The new regulations will apply to companies, branches and permanent establishments that are part of an international or domestic capital group, whose global annual revenues amount to at least EUR 750 million in the period of 2 of the last 4 years.

It is planned to introduce 3 types of taxes:

1. Global top-up tax - will be imposed on parent entities; the obligation to pay it in Poland will arise when the headquarters operates in Poland, and subsidiaries operating in other tax jurisdictions do not reach the minimum effective tax rate;

2. Domestic top-up tax - will be imposed on Polish subsidiaries; the obligation to pay it in Poland will arise when the effective tax rate of subsidiaries operating in Poland does not exceed 15%;

3. Tax on under-taxed profits - may be imposed on Polish subsidiaries if the parent company operates in a country that has not introduced the "Pillar II" regulations.

Therefore, regardless of whether the company is a parent company or a subsidiary (operating within a Polish or international capital group),it is essential to verify  whether the group exceeds the consolidated revenue threshold, which may lead to the imposition of top-up tax and thus to the obligation to implement the complicated process of the new method of taxation.

If  the group meets the criterion of consolidated revenue, then the following should be determined, among others:

• the tax jurisdictions in which your group operates,
• the effective tax rate in the individual countries in which your group operates,
• the possibility of applying an exemption from top-up tax.

If a company is to be subject to the top-up tax in 2025, it will be required to submit tax information and a tax return in 2027.

Detailed information on the functioning of the top-up tax together with a description of the support we offer in preparing for the entry into force of the new regulations can be found in the document below. We encourage familiarizing yourself with our study in detail.

Should you have any questions, please do not hesitate to contact Forvis Mazars' Tax Advisory Department.