Pillar Two Implementation in Europe, 2026

Twenty-two of the 27 Member States of the European Union have implemented both the QDMTT, the IIR, and the UTPR by 2026, while five have not.

Five EU Member States can opt for a six-year deferral of Pillar Two implementation, and all of them have done so, with Estonia , Latvia , Lithuania , and Malta deferring all rules until 2029, while Slovakia selectively implemented only a domestic top-up tax in 2024.

By the year 2030, implementation of the Pillar Two Directive would compromise key design features of the distribution-based corporate tax systems in Estonia and Latvia by obliging in-scope companies to distribute sufficient earnings to meet the 15 percent minimum effective tax rate.

Four EU Member States-Cyprus, Poland , Portugal , and Spain -have implemented Pillar Two rules with delay, despite obligations under the EU Directive . In these countries, the rules apply retroactively for 2024.

Among eight major European countries outside of the European Union, only Norway , Turkey , and the United Kingdom have implemented a QDMTT, an IIR, and a UTPR by 2025. Switzerland implemented a QDMTT in 2024 and an IIR in 2025, but has not set forward any plans to implement a UTPR. Iceland is undergoing public consultation to implement a QDMTT and an IIR in 2026, with no statements regarding a UTPR. Georgia , Moldova, and Ukraine , the latest candidates for EU accession, have not publicly announced intentions to implement any Pillar Two rules.

In contrast to many European countries, the US has chosen not to implement changes in line with the global tax deal. In June 2025, the G7 announced a political agreement on a global minimum tax "side-by-side" solution that would exclude US-parented groups from Pillar Two's IIR and UTPR.

Instead, the US has continued to develop its own cross-border tax framework. Recent changes to US international tax rules in the One Big Beautiful Bill Act ( OBBBA ) produce an outcome similar to Pillar Two, despite the rules themselves being distinct. The newly introduced net CFC tested income (NCTI) acts as a minimum tax of between 12.6 and 14 percent on all foreign income of US companies, using a blended formula instead of country-by-country. Due to less generous foreign tax crediting, the removal of the substance exclusion , lack of loss carryovers, and interest deductibility rules, the US system may be more stringent than Pillar Two.