9. January 2023

IASB proposes temporary relief from deferred tax accounting for OECD Pillar Two taxes

The International Accounting Standards Board (IASB) has today published an Exposure Draft IASB/ED/2023/1 International Tax Reform—Pillar Two Model Rules Proposed amendments to IAS 12.

The proposed amendments aim to provide temporary relief from accounting for deferred taxes arising from the imminent implementation of the Pillar Two Model Rules published by the Organisation for Economic Co-operation and Development (OECD).

The IASB is responding to stakeholders’ concerns about the potential implications of these rules for the accounting for income tax in financial statements.

The proposed amendments would introduce:

  • a temporary exception to the accounting for deferred taxes arising from the implementation of the rules; and
  • targeted disclosure requirements for affected companies.

The Exposure Draft IASB/ED/2023/1 is open for comment until 10 March 2023. The IASB aims to finalise any amendments in the second quarter of 2023, subject to comments on the Exposure Draft. (IASB press release)

The ASCG is working intensively in its technical committees on the OECD rules on minimum taxation. Against the background of various potential issues in connection with the upcoming implementation of the OECD Pillar Two Model Rules, the ASCG has decided to establish a Tax Working Group. The working group is to address both issues related to the implementation of the OECD Pillar Two Model Rules and issues related to the impact of the new rules on financial reporting.