The adopted bill is in line with the updated draft introduced by the Luxembourg government on 13 November 2023 which incorporated clarifications and technical provisions from OECD GloBE administrative guidance stemming from the February and July 2023 OECD guidelines.

The adopted bill does not however consider the latest guidance released by the OECD on 18 December 2023 and therefore is it possible that the Luxembourg Pillar 2 law will be amendment in the near future to take into account these latest developments.

In terms of timing, the Income Inclusion Rule (IIR) and the Qualified Domestic Top-up Tax (QDMTT) will enter into force for fiscal years starting on or after 31 December 2023 and for the Undertaxed Profit Rule (UTPR) for fiscal years starting on or after 31 December 2024.

For more details please refer to our recent blog post on Luxembourg's implementation of Pillar Two which can be accessed here.