This case study examines the interaction of the Income Inclusion Rule (IIR), Qualified Domestic Minimum Top-Up Tax (QDMTT), and the Undertaxed Profits Rule (UTPR) within a cross-border restructuring undertaken by a multinational enterprise (MNE). The restructuring, implemented for legitimate business reasons and involving the reorganization of holding structures, may also produce additional, Pillar Two–positive effects by removing IIR exposure for EU-based sub-holdings and causing any residual top-up tax to be picked up under UTPR in other implementing jurisdictions. The analysis focuses on the consequences of transferring ownership of a low-taxed constituent entity (LTCE) from an IIR-applying EU Holding Company (EU HoldCo) to a United Arab Emirates (UAE) group entity, particularly where a minority shareholder holds less than 50% of the LTCE.
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