The International Accounting Standards Board (IASB) has issued amendments to IAS 12, Income Taxes, intended to give companies temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development (OECD)’s international tax reform.

More than 135 countries and jurisdictions representing more than 90 percent of global gross domestic product have agreed to the Pillar Two model rules that were published in December 2021. Under those rules, companies headquartered within their borders would be required to pay a minimum tax rate of at least 15 percent in each of the nations in which they operate. The United States played a large role in this process, but the proposed legislation codifying this into American law did not pass Congress.

“The IASB has taken urgent action to respond to stakeholders’ concerns about the uncertainty over the accounting for deferred taxes arising from the implementation of the rules,” the IASB said in a statement.

One amendment will introduce a temporary exception to the accounting for deferred taxes arising from jurisdictions implementing the global tax rules, intended to help to ensure consistency in financial statements while easing into the implementation of the rules. Another amendment will introduce targeted disclosure requirements to help investors better understand a company’s exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect.

Companies can benefit from the temporary exception immediately but are required to provide the disclosures to investors for annual reporting periods beginning on or after Jan. 1, 2023.

“These amendments respond to stakeholder feedback and will ensure that companies are supported during the implementation of the OECD’s rules, while enhancing the financial information provided to investors about how these companies are affected by the international tax reform," IASB Chair Andreas Barckow said in a statement. “We are monitoring developments as jurisdictions implement the Pillar Two model rules. A future maintenance project has been added to the pipeline in which we will revisit the temporary exception and related disclosures.”