[World Tax News] France Issues Pillar Two GloBE Guidance and More

Editorial Team – [2025] 179 taxmann.com 429 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. French Tax Authority publishes initial guidance on Pillar Two GloBE Rules implementation

The French tax authority has released guidance on the application of the Pillar Two Global Minimum Tax (GloBE) Rules. As previously noted, France transposed Council Directive (EU) 2022/2523 of 14 December 2022 implementing the GloBE rules through the Finance Law for 2024.

The French legislation incorporates the Income Inclusion Rule (IIR) and the Undertaxed Payment/Profit Rule (UTPR) to ensure a minimum effective tax rate of 15% for multinational enterprise (MNE) groups with consolidated annual revenue of at least EUR 750 million in at least two of the preceding four fiscal years. It also introduces a Qualified Domestic Minimum Top-up Tax (QDMTT), referred to in France as a complementary (supplementary) national tax.

These rules generally apply to financial years beginning on or after 31 December 2023, except for the UTPR, which applies to financial years beginning on or after 31 December 2024.

The initial guidance provides clarification on key definitions under the GloBE rules, as well as their scope and territorial application, including entities covered by the rules, excluded entities, and specific territoriality considerations. According to the tax authority, additional guidance is being developed on safe harbours, effective tax rate determination, filing and payment obligations, and other related aspects.

Source – IMG – Global Taxation of Taxes

2. Germany proposes expansion of tax treaties covered under the MLI

The German Ministry of Finance has issued a draft bill proposing an expansion of the scope of tax treaties covered under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).

Germany’s initial list of reservations and notifications under the MLI included 14 tax treaties as covered agreements. The proposed draft seeks to add 62 more tax treaties that currently do not meet the minimum BEPS standards, thereby broadening the MLI’s application.

To effect this change, Germany must approve the draft bill and submit an updated list of reservations and notifications reflecting the inclusion of these 62 additional treaties. However, for the MLI to apply to any particular tax treaty, the treaty partner must also designate that treaty as a covered agreement in its own list of reservations and notifications.

Additionally, Germany has maintained its reservation that the MLI will only take effect for a specific treaty once Germany has deposited a notification confirming the completion of its internal procedures required for the MLI’s entry into force. Where the treaty partner has taken a similar reservation, both parties must deposit such notifications before the MLI can become effective for that treaty.

Source – Draft Bill

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