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CA Final · Direct Tax Laws & International Taxation · Latest Developments in International Taxation

Under the OECD Pillar Two GloBE model rules, a multinational enterprise group is within scope when its consolidated revenue meets a particular threshold in at least two of the four preceding fiscal years. Hindustan Global Ltd. has consolidated group revenue of EUR 600 million in each of the last four years. What is the minimum effective tax rate that Pillar Two seeks to ensure for in-scope groups in each jurisdiction?

The Pillar Two minimum effective tax rate is 15 percent, applied jurisdiction by jurisdiction. Groups are in scope only if consolidated revenue is at least EUR 750 million in two of the four preceding years, so Hindustan Global with EUR 600 million would actually fall outside the rules.

  1. A15 percentCorrect
  2. B25 percent
  3. C10 percent
  4. D20 percent

Explanation

The GloBE rules apply to groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years. Hindustan Global's EUR 600 million is below that, so it would not be in scope, though the question asks only for the rate. The global minimum effective tax rate under Pillar Two is 15 percent, not 10, 20 or 25.

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