US MNEs, How Will Pillar Two Impact Your Business?

We recently hosted the webinar 'The Implications of Pillar Two on US MNEs' as part of our Pillar Two webinar series.

We have seen that US MNEs still have a lot of questions about the impact of Pillar Two on their structures. As follow-up to the webinar, we have prepared a Q&A that contains practical and to-the-point answers to the top 10 questions that we have seen in the market.

The Q&A provides practical guidance on how US MNEs can navigate the recent developments introduced by Pillar Two.

1. What are the various taxing possibilities for countries under the Pillar Two rules?

The primary rule under Pillar Two is the IIR. The IIR gives taxing rights to the UPE of the MNE group. In case of a US UPE, the IIR will not be applied at the level of the US UPE but at the level of its first subsidiary located in a country that has adopted the IIR. Special rules apply in – amongst others – cases of so-called Partially-Owned Parent Entities.