Draft Canadian Pillar Two Global Minimum Tax Legislation And Revised DST Legislation

Table of contents

• GMTA implements GloBE model rules, commentary and administrative guidance
  • Scope of GMTA
  • Income inclusion rule
  • Safe harbours and simplifications
  • QDMTT
  • Global minimum tax administration and compliance
• Revised DST legislation
  • Key definitions and concepts
  • Election for retroactive years
  • New sections on bankruptcy/receivership and partnerships
  • Procedural and administrative changes
• Further reading

On August 4, 2023, the Department of Finance released draft legislation [PDF] implementing two key measures of the OECD's Pillar Two global minimum tax (GMT) in Canada, namely, the income inclusion rule (IIR) and a domestic minimum top-up tax that is intended to be a qualified domestic minimum top-up tax (QDMTT), as defined in the GloBE Model Rules. These rules will apply to fiscal years of qualifying MNE groups beginning on or after December 31, 2023 in line with the OECD's recommended