BEPS Pillar 2 – The Impact on German Companies Doing Business in Hong Kong

On 8 October 2021, the G20/OECD Inclusive Framework on BEPS published a statement on a two-pillar approach to global tax reform, agreed by 136 of its members. Thereafter, on 20 December, the OECD published its Global Anti-Base Erosion (GloBE) rules. In particular, Pillar 2 of that approach will introduce a global minimum tax, often referred to as 'GloBE'.

The global minimum tax will be 15%, calculated as an effective tax rate based on a specific ruleset. Any multinational company with revenue of at least EUR 750 million could be impacted irrespective of the headline tax rate in a particular jurisdiction, e.g., Hong Kong. MNC with an effective tax rate below the minimum would be required to pay top-up tax.

On 22 December 2021, the European Union Council published a draft proposal on ensuring minimum taxation for MNC in the EU, i.e. Pillar 2 rules for the EU market.

German MNC with subsidiaries in Hong Kong are likely to be most affected by the global minimum tax. As a result, it can be anticipated that Hong Kong will itself introduce a domestic minimum tax that is based on the global rules, in order to allow Hong Kong to collect any top-up tax itself, rather than each respective head office location.

We will provide answers to the following questions:

• How will the rules likely impact your business?
• What difference does the lack of a tax treaty between Germany and Hong Kong make?
• How do the OECD rules interact with the EU Directive and German CFC taxation?
• What measures can be taken to align the reporting processes and what level of governance is required?

Remarks:

• Access link for the webinar will be sent to participants 1 day before the event. This session will be conducted via GoToWebinar.

Registration Deadline: Thursday, 24 February 2022

If you would like to receive future GCC event invitations, please click here​

This Webinar may be recorded for internal reference.

No part of this Webinar may be reproduced without prior permission from the organiser. While every reasonable effort is made to ensure that the information provided is accurate, no guarantees for the currency or accuracy of information are made. All material relating to information, products and services (or to third party information, products and services), is provided 'as is', without any representation or endorsement made and without warranty of any kind, including the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy. The speakers are solely responsible for the content thereof; In no event will the organiser be liable for any loss or damage whatsoever arising from infringement or errors or any defect of rights of the content of the webinar. Views expressed are not necessarily those of GCC. We are working with service providers to bring this webinar to you. When joining the webinar, you will be bound by the provider's terms of service, including it's privacy policy which you can download from the their website. Please note that we have no responsibility for the collection or use of your personal data by the service provider or any third party application.