The IASB published the Exposure Draft International Tax Reform—Pillar Two Model Rules in January 2023. The Exposure Draft is open for comment until 10 March 2023.
The IASB discussed the potential effects of the OECD’s Pillar Two model rules on the accounting for income taxes by an entity applying IAS 12 Income Taxes. In particular, the IASB considered whether to undertake a standard-setting project in response to the imminent implementation of the rules.
The IASB tentatively decided to amend IAS 12 to introduce a temporary exception from the requirement to account for deferred taxes arising from the implementation of the OECD’s Pillar Two model rules (including any qualified domestic minimum top-up tax). The exception would apply until the IASB either removes the exception or makes it permanent.
All 11 IASB members agreed with this decision.
The IASB tentatively decided to amend IAS 12 to require an entity to disclose, in periods before the Pillar Two model rules are in effect, and for the current period only:
The IASB also tentatively decided to amend IAS 12 to require an entity to disclose:
All 11 IASB members agreed with this decision.
The IASB tentatively decided to require an entity to apply:
Eight of 11 IASB members agreed with these decisions.
The IASB tentatively decided to allow a comment period of 60 days for the exposure draft on its proposed amendments to IAS 12 (subject to approval by the Due Process Oversight Committee).
All 11 IASB members agreed with this decision.
All 11 IASB members confirmed they were satisfied the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting an exposure draft.
No IASB member indicated an intention to dissent from publishing an exposure draft.
Exposure Draft Feedback
Due Process Oversight Committee December 2022