30/01/2023 - EFRAG Draft Comment Letter on the IASB’s ED/2023/1 International Tax Reform – Pillar Two Model Rules

​The ED, which was issued on 9 January 2023, proposes to introduce a mandatory temporary exception to the requirements in IAS 12 to recognise and disclose information about deferred tax assets and liabilities arising from the OECD’s Pillar Two Model Rules. The ED also proposes the introduction of targeted disclosures.

In its letter, EFRAG welcomes the IASB’s efforts to address the concerns of stakeholders about the implications for income tax accounting resulting from jurisdictions implementing the Pillar Two model rules. 

EFRAG supports the IASB’s proposal to introduce the aforementioned temporary exception to the requirements in IAS 12. However, EFRAG will engage with its constituents during the outreach of the ED to ascertain the usefulness of the proposed targeted disclosures for users and to assess the feasibility (including costs) for preparers.

This amendment is urgently needed to deal with the income tax implications arising from the OECD’s Pillar Two Model Rules. It is expected that some jurisdictions will enact this law as early as 2023. Given the urgency of the matter, the IASB and EFRAG have substantially reduced their consultation periods and is having a fast-track due process.

EFRAG's Draft Comment Letter can be found here. 

Comments can be submitted until 27 February 2023.