The article was drafted by Tasos Koletsas, Associate, Alexandre Karadima, Senior Associate & Evi Kontomari, student at the Law School of the Aristotle University of Thessaloniki (AUTH) for Lexology on 10 October 2026
The Global Minimum Tax Initiative: From International Developments to the Greek Framework
The increasing globalization of the economy and the expansion of cross-border activities carried out by multinational enterprises have revealed significant shortcomings in the traditional international tax framework. The ability of multinational groups to allocate profits to low-tax or no-tax jurisdictions, through complex corporate structures and tax planning arrangements, has resulted in substantial erosion of countries’ tax bases and intensified harmful tax competition between jurisdictions. Addressing these challenges became a key priority of international tax policy, leading to the development of the OECD and G20 initiatives aimed at tackling Base Erosion and Profit Shifting (BEPS). In 2013, the OECD and G20 adopted a 15-point Action Plan on BEPS, which resulted in the BEPS package delivered in 2015. The BEPS project sought to address tax avoidance strategies and strengthen the coherence of international tax rules, while ensuring that profits are taxed where the economic activities generating them take place and where value is created. Pillar Two, however, was not part of the original 15 BEPS Actions, but emerged as a subsequent stage in the international tax reform process. Following the work undertaken under the OECD/G20 Inclusive Framework on BEPS, the OECD developed the Global Anti-Base Erosion (GloBE) proposal as part of the broader Two-Pillar Solution to the tax challenges arising from the digitalisation and globalisation of the economy. The Programme of Work published in 2019 marked a significant step towards the development of Pillar Two, which was subsequently further developed and ultimately incorporated into the OECD/G20 international tax reform framework.
The policy objectives underlying Pillar Two extend beyond addressing traditional profit-shifting arrangements. In particular, the framework seeks to address remaining BEPS challenges, establish a floor for excessive tax competition between jurisdictions, and protect developing countries from certain forms of base-eroding payments. In this context, Pillar Two introduces the GloBE Rules, establishing a global minimum effective tax rate of 15% for multinational enterprise groups with consolidated annual revenues exceeding EUR 750 million. The framework is intended to ensure that the profits of large multinational enterprises are subject to a minimum level of taxation, regardless of the jurisdiction in which such profits arise, thereby reducing incentives to shift profits towards more favourable tax environments and limiting the scope for excessive tax competition.The European Union incorporated the principles of Pillar Two through Council Directive (EU) 2022/2523, commonly referred to as the Minimum Taxation Directive, which was adopted in December 2022 with the aim of ensuring the uniform implementation of the GloBE Rules across EU Member States. The Directive forms part of the broader international consensus developed under the auspices of the OECD/G20 Inclusive Framework and seeks to establish a coordinated framework for minimum taxation across participating jurisdictions.
Greece implemented the Directive into its domestic legal order through Law 5100/2024, adopting almost the entirety of the Pillar Two framework and establishing the necessary regulatory and administrative mechanisms for its application. Furthermore, recent developments at OECD level, particularly the publication of the “Side-by-Side” Package in January 2026, introduced additional simplification mechanisms and specific safe harbours aimed at enhancing the practical implementation and stability of the Pillar Two framework.
This article provides an overview of the main provisions of Directive (EU) 2022/2523, examines the fundamental mechanisms underlying the global minimum taxation system, analyzes its implementation within the Greek legal framework through Law 5100/2024, and outlines the most significant developments introduced by the “Side-by-Side” Package regarding the future application of Pillar Two rules.
Basic Terms and Structure of Pillar Two Rules
The Pillar Two framework establishes a global minimum taxation mechanism designed to ensure that large multinational enterprise (MNE) groups that are in scope of the rules are subject to an effective tax rate of at least 15% on the income arising in each jurisdiction where they operate. The primary responsibility for applying these rules lies with the relevant parent entities, including Ultimate Parent Entities (UPEs) and, in certain circumstances, Intermediate Parent Entities (IPEs), particularly where constituent entities of the group are located in jurisdictions with an effective tax rate below the minimum threshold.
The Pillar Two rules generally apply to MNE groups and large-scale domestic groups with consolidated annual revenues of at least EUR 750 million in at least two of the four fiscal years immediately preceding the tested fiscal year. Within an in-scope group, the rules generally apply to its constituent entities, including entities located in jurisdictions where the group has a taxable presence. Certain entities, however, are excluded from the scope of the GloBE Rules by virtue of their nature or status, including governmental entities, international organisations, non-profit organisations, pension funds and certain investment funds. The EUR 750 million revenue threshold therefore constitutes the principal criterion for determining whether a group falls within the scope of the Pillar Two framework, while the specific status and characteristics of individual entities determine whether they are treated as constituent entities or fall within an applicable exclusion.
The determination of whether the minimum taxation level has been achieved is based on the jurisdictional Effective Tax Rate (ETR), calculated by dividing the adjusted covered taxes of the constituent entities located in a jurisdiction by their corresponding qualifying income. For this purpose, adjusted covered taxes comprise current taxes together with certain deferred tax amounts, subject to the adjustments prescribed by the GloBE Rules, while qualifying income (or loss) is based on the financial accounting net income or loss of the constituent entities as adjusted under the relevant GloBE provisions.
Where the jurisdictional ETR falls below 15%, the Directive provides for the imposition of a top-up tax through three complementary charging mechanisms. The primary mechanism is the Income Inclusion Rule (IIR), pursuant to which the parent entity of the MNE group is required to pay the additional tax in respect of low-taxed constituent entities. Where the IIR does not apply, the Undertaxed Profits Rule (UTPR) operates as a secondary mechanism, enabling other jurisdictions in which constituent entities are located to collect the remaining amount of top-up tax. Finally, jurisdictions may introduce a Qualified Domestic Top-Up Tax (QDTT), allowing them to collect the additional tax domestically before the charging rights arise under the IIR or the UTPR.
Beyond the charging mechanisms, the Pillar Two framework also introduces significant compliance obligations. MNE groups remain subject to the OECD Country-by-Country Reporting (CbCR) standards and are required to submit a GloBE Information Return (GIR), containing the information necessary for the calculation of the jurisdictional effective tax rate and any applicable top-up tax, within the deadlines established by the applicable legislation. At EU level, these reporting and information-exchange requirements have been further developed through Council Directive (EU) 2025/872 (DAC9), which establishes the framework for the filing and exchange of the GloBE Information Return among Member States. DAC9 is intended to facilitate the coordinated administration of the Pillar Two rules by enabling the relevant tax authorities to obtain and exchange the information necessary for the assessment and enforcement of the minimum taxation rules.
In Greece, the DAC9 framework has been incorporated into the domestic tax system through the relevant amendments to the Greek tax legislation, complementing the Pillar Two rules already introduced by Law 5100/2024 and establishing the domestic framework for the filing and exchange of the GloBE Information Return.
You can read the full article here: The New Era of Global Minimum Taxation: Pillar Two Rules, Greek Implementation and Key Implications for Businesses – Lexology