Insurance Europe has today published its response to a consultation conducted by the EC on its draft Directive for the implementation of the Organisation for Economic Cooperation and Development (OECD) Pillar 2 anti-base erosion rules.
The OECD rules aim to ensure large multinational firms pay a minimum level of tax on the income arising in each of the jurisdictions in which they operate.
The insurance industry shared its concerns about the draft Directive, which relate to:
- The interaction of Pillar 2 with certain domestic tax treatments and the definition of insurance investment funds, which does not reflect insurers’ business model.
- The fact that the introduction of a carry forward or averaging instrument when calculating the Effective Tax Rate would be more appropriate.
- The need for simplifications to avoid an excessive administrative burden and the rise of compliance costs.
- The fact that the implementation of a sunset clause would allow for fine-tuning and adjustments of the Pillar 2 rules.