Pillar Two: Intragroup Financing Arrangements Part 2 – New York Office Snippet

Loyens & Loeff New York regularly posts 'Snippets' on a range of EU tax and legal topics. In a previous Snippet, we described hybrid financing arrangements (HFAs) under article 3.2.7 of the Pillar Two (P2) model rules. This Snippet describes the treatment of certain HFAs under the P2 guidance published by the OECD in December 2023 (the Guidance) for purposes of the transitional country-by-country reporting safe harbour (SH) rules.

The SH rules temporarily allow an MNE to avoid undertaking detailed P2 calculations in respect of low-risk countries in the initial P2 years by making use of its existing country-by-country report and financial accounting data with little to no modifications. The SH rules do not contain a provision equivalent to article 3.2.7 of the P2 model rules.