PILLAR 2 | selection of taxable constituent entity until 31.12.2024
The global minimum taxation (Pillar II) will impose new tax obligations on the companies concerned. In many cases, these will only lead to specific declaration obligations in 2026. However, a significantly earlier deadline of 31 December 2024 must be observed for commissioning the domestic taxable person. It has recently become possible to make the relevant declaration to the Austrian tax authorities. If the notification is not made, a legal regulation comes into force that can lead to undesirable consequences.
To simplify the collection of any top-up tax where more than one constituent entity (CE) is located in Austria, Austrian Pillar 2 legislation requires only one of the Austrian CEs to actually pay the tax. This "single taxable CE" is thus solely responsible for the group's top-up tax liability in Austria. All other Austrian CEs remain subject to the minimum tax, but only if the "single taxable CE" does not or is unable to pay the top-up tax due. Austrian law therefore provides for a series of tests to determine the group’s "single taxable CE" for these purposes, which may lead to unfavorable results.
However, in order to provide maximum flexibility to Pillar Two taxpayers, the ultimate parent entity (UPE) may deviate and choose the "single taxable CE". To make use of this election, however, the Austrian "single taxable CE" must upload a signed confirmation from the UPE that it will assume the role of "single taxable CE" in Austria. The upload is to be made via the Austrian tax authority's filing platform “FinanzOnline” by 31 December 2024.
FAZIT
In case you need support in selecting the Austrian “single taxable CE” and filing the notification please do not hesitate to contact us. We will be happy to support you!
