EFRAG publishes final comment letter in response to IASB’s Exposure Draft International Tax Reform - Pillar Two Model Rules (Proposed Amendments to IAS 12)

The IASB issued Exposure Draft International Tax Reform - Pillar Two Model Rules (Proposed Amendments to IAS 12) on 9 January 2023. The Exposure Draft proposes to introduce a mandatory temporary exception to the requirements in IAS 12 Income Taxes to recognise and disclose information about deferred tax assets and liabilities arising from the OECD’s Pillar Two Model Rules. The Exposure Draft also proposes the introduction of targeted disclosures.

EFRAG has now published its final comment letter in response to the Exposure Draft, in which EFRAG generally supports the IASB’s proposal to introduce the temporary exception. EFRAG proposes some improvements on the proposed targeted disclosures and encourages the IASB to add a disclosure objective that describes the needs of users of financial statements as it might help entities to apply judgment. Further, EFRAG has noted that given the urgent need of the exception, perfecting the disclosure requirements should not come at the price of delaying the finalisation of the amendments.  

The final comment letter may be accessed here.