Pillar Two: Points Of Attention In M&A Transaction Documents – New York Office Snippet

Loyens & Loeff New York regularly posts 'Snippets' on a range of EU tax and legal topics. This Snippet describes a selection of Pillar Two ('P2') attention points in M&A transaction documents.

P2 seeks to enforce a global minimum income tax at an effective rate ('ETR') of 15% for each country in which an in-scope MNE operates. When buying or selling a target company ('Target'), parties should consider how to address P2 and allocate related risks in the share purchase agreement ('SPA'). In this Snippet, we highlight three P2 attention points in relation to SPAs.

Some jurisdictions (e.g. the Netherlands) have introduced secondary tax liabilities in their domestic P2 legislation pursuant to which other entities within the MNE group are jointly and severally liable for P2 top-up tax due in that jurisdiction. Such secondary tax liabilities may even apply to group entities located outside that jurisdiction. As is the case with secondary tax liabilities that may apply