What filing obligations do I have?
The filing obligations of the global minimum corporate taxation consist of two separate tax assessments: - The top-up tax information return; and - The regular tax return. The top-up tax information return reports the information that is needed to determine whether a top-up tax has to be paid. The top-up tax information return functions as the basis on which the regular tax return is prepared. For example, it holds information about the group entities, information about the group structure, and most importantly, information that is needed to calculate the top-up tax. The top-up tax information return will be shared between countries that have a qualifying agreement for the financial year. The top-up tax information return is filed by the ultimate parent entity.
Under certain circumstances, however, the top-up tax information return can be filed by another member of the group. After the filing of the top-up tax information return, the regular tax return has to be filed in the relevant countries. In this tax return, the actual calculation to determine the top-up tax has to be made, with the help of the information filed in the top-up tax information return. The tax return consists of the top-up tax per country. In the Netherlands, it will be a self-assessed tax filing, comparable to VAT filings and Dutch dividend withholding tax filings. As such, the taxable amount will not be determined by a tax assessment raised by the Dutch tax authorities.
When do these tax assessments have to be filed?
Because the calculations to determine the top up tax depend on the regular (annual) CIT-returns, the deadlines to file the top-up tax information return and the regular top-up tax return are longer than those of the regular corporate income tax-returns. Furthermore, as a result of the complexity of the Pillar 2 rules, the deadlines to file the tax assessments of the first reporting year differ from that of the reporting years following that.
For the first reporting year, the deadline to file the top-up tax information return is eighteen months after the endi of the first reporting year (being December 31st, 2024, for companies for which the financial year equals the calendar year). This means that the top-up tax information return regarding the first reporting year has to be filed before June 30th, 2026.
The regular tax return then has to be filed two months after the top-up tax information return, so twenty months after the end of the first reporting year. This means that the regular tax return has to be filed before August 31st, 2026, for companies for which the financial year equals the calendar year.
For the years from the second reporting year and after, the deadlines are three months shorter. The deadline to file the top-up tax information return will be fifteen months after the end of the reporting year. For the regular tax return, this means that it has to be filed seventeen months after the end of the reporting year.
What happens when the tax returns are not filed (in time)?
If the top-up tax information return and/or the regular tax return are not filed in time, a fine will follow. In the case that the top-up tax information return is not filed in time, an administrative fine of the 6th category, with a maximum of 900.000 euro, will follow. If the regular tax return is not filed in time, an administrative fine of the 4th category, with a maximum of 22.500 euro, could be imposed. On top of that, criminal prosecution will be possible if the top-up tax information return and/or the regular tax return are not filed (in time).
Local notification requirement
In principle the Pillar 2 information tax return only needs to be filed in one jurisdiction, provided that this jurisdiction has an agreement for automatic exchange of the tax return with all other jurisdictions where the company is situated.
Various countries have announced that they will require companies to register locally if the information tax return will not be filed there and notify them of where the return will be filed. The Netherlands, Belgium, and the UK have already announced such requirements, and more countries are likely to follow. The most stringent deadline is for Belgium: 13 July 2024 for companies for which the financial year equals the calendar year. The deadline for the UK is six months after the end of the 2024 financial year. The Dutch tax authorities have announced that the specifics of the notification, including the deadline, will be announced later.
Way forward for Pillar 2
We recognize that these obligations are very complex and will increase the already high administrative burden. We are ready to help you with collecting the required information and the filing of the tax assessments. This way, you will be unburdened and prevent any possible fines. Also, if you have any questions feel free to contact us. For more information on the developments around Pillar 2, take a look at our Pillar 2 blog.
