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ARTICLE · 08 NOVEMBER 2023

Pillar Two: Consolidated Joint Ventures Under Pillar Two – New York Office Snippet

Loyens & Loeff
Loyens & Loeff
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Loyens & Loeff NY regularly posts ‘Snippets' on a range of EU tax and legal topics. This Snippet describes the treatment of consolidated joint ventures (‘JV') under Pillar Two (‘P2').

GlobalTax
Michiel Schul
Michiel Schul
Steffie Klein
Steffie Klein
Lisanne Bergwerff
Lisanne Bergwerff

Loyens & Loeff NY regularly posts 'Snippets' on a range of EU tax and legal topics. This Snippet describes the treatment of consolidated joint ventures ('JV') under Pillar Two ('P2').

P2 applies to MNE groups with annual revenues exceeding € 750M. An MNE group consists of entities that the ultimate parent entity ('UPE') includes in its consolidated financial statements on a line-by-line basis. This can include entities that are not 100% owned but nevertheless controlled by the MNE group. Such entities (referred to under P2 as 'split ownership') can give rise to surprising P2 outcomes.

P2 distinguishes two types of split ownership in a JV: (i) a JV that is consolidated in the accounts of the UPE ('Consolidated JV') and (ii) a JV that is not consolidated. In this Snippet, we solely discuss Consolidated JVs.

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