MF Order No. 203/2026: implications regarding the global minimum tax, deferred tax treatment and the transition to IFRS

This order establishes the conditions under which entities subject to the global minimum tax may transition to International Financial Reporting Standards (IFRS) and provides clarifications on the presentation of deferred taxes by entities applying local accounting regulations, namely Order no. 1802/2014.

In this respect, the following aspects are introduced:

• Constituent entities that fall within the scope of the global minimum tax and apply the accounting regulations set out in Order no. 1802/2014 are required to disclose deferred tax in the notes to the annual financial statements starting with the 2025 financial year. Such deferred tax is not recognised in the accounting records and is used solely for the purpose of determining the effective tax rate.
• The determination of deferred tax assets and liabilities must be carried out in compliance with the provisions of IAS 12.
• Constituent entities may opt to apply IFRS-compliant accounting regulations, as approved by Order no. 2844/2016.
• The transition to IFRS-compliant accounting regulations is to be implemented starting with the annual financial statements for the 2025 financial year, which represents the transition year.
• For the preparation of the first IFRS financial statements, entities are required to apply the provisions of IFRS 1 “First-time Adoption of International Financial Reporting Standards”, including the requirement to prepare the IFRS opening balance sheet as of the transition date (1 January 2025).
• Entities that subsequently fall outside the scope of Law no. 431/2023 may either continue to apply IFRS or revert to the application of local accounting regulations under Order no. 1802/2014.

From a practical perspective, the Order provides companies with a clearer framework for addressing deferred tax in the context of the global minimum tax, while also confirming the option to adopt IFRS where this framework is more appropriate for their reporting needs. This option may be of particular interest to entities seeking better alignment between group reporting requirements and local reporting requirements, where efficiencies can be achieved by eliminating reconciliations between the two financial reporting frameworks.

Considering the above-mentioned aspects, we recommend the following:

• Analysis of whether companies fall within the scope of the global minimum tax rules and calculation of the tax, starting with the 2024 financial year.
• Assessment of the opportunity to transition to IFRS from an operational and reporting perspective, especially in situations where reporting is prepared both under national standards and IFRS, as well as in the context of reconciliations between the two accounting frameworks.
• Analysis of the impact of the IFRS transition on the relevant tax regulations applicable to the transition process.
• Determination of deferred taxes.

Our team is available to provide specialised financial and tax assistance, including support with assessing the applicability of the global minimum tax rules at entity level, evaluating the opportunity to transition to IFRS and the implications associated with the application of IFRS 1, analysing the tax impact arising from the transition to IFRS, as well as assistance in implementing a coherent and well-documented process.

For further details, please contact us below.