Commission Regulation (EU) 2023/2468 of 8 November 2023 amending Regulation (EU) 2023/1803 as regards International Accounting Standard 12

New Commission Regulation (EU) 2023/2468 relating to the application of International Accounting Standard 12 (IAS 12) was published in the Official Journal (EU) of the EU. The Regulation modifies Commission Regulation (EU) 2023/1803 which itself (re)established international accounting standards for public companies in accordance with Regulation (EC) No 1606/2002. The purpose of the modifications is to account for recently introduced amendments to IAS 12 by the International Accounting Standards Board. Specifically, the Board modified IAS 12 to provide for „a temporary exception from accounting for deferred taxes arising from the implementation of the OECD’s Pillar Two model rules“ which are those rules implementing the minimum taxation requirements for multinational firms and to make corresponding modifications to the disclosure requirements of affected firms.
Specifically, new Commission Regulation (EU) 2023/2468 now stipulates that
– „an entity shall neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes“.
– an entity should
– make clear in its disclosures if it has applied an exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
– separately disclose its current tax expense or income related to Pillar Two income taxes.
– When Pillar Two legislation is enacted but not yet in effect, an entity must disclose known or reasonably estimable information that helps users understand its exposure to Pillar Two income taxes arising from that legislation.
– an entity should disclose both qualitative and quantitative information about its exposure to Pillar Two income taxes at the end of the reporting period. This information doesn’t have to cover all specific requirements of Pillar Two legislation and can be provided as an indicative range. If any information is not known or reasonably estimable, an entity should disclose this fact and provide information about its progress in assessing its exposure.