Background
Building on its earlier work on BEPS that culminated in the issuance in 2015 of final reports on 15 action areas, the OECD in 2019 began a new project focused on addressing the tax challenges of the digitalization of the economy. The current project, referred to as BEPS 2.0, is being conducted through the OECD/G20 Inclusive Framework, which now has 141 participating jurisdictions.
In January 2019, the OECD released a Policy Note communicating that renewed international discussions would focus on two central pillars: one pillar addressing the broader challenges of the digitalization of the economy and focusing on the allocation of taxing rights, and a second pillar addressing remaining BEPS concerns.1 In February 2019, the OECD released a Public Consultation Document2 describing the two-pillar proposals at a high level. The OECD received extensive comments from stakeholders and held a public consultation in March 2019.3
Following the public consultation, in May 2019, the OECD released the “Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy,” reflecting the two pillars:4
- Pillar One on development of new nexus and profit allocation rules to assign more taxing rights to market countries
- Pillar Two on development of new global minimum tax rules
On 8 November 2019, the OECD released a Consultation Document on Pillar Two5 and on 9 December 2019 the OECD hosted a consultation meeting to give stakeholders an opportunity to discuss their comments with the Inclusive Framework jurisdictions.6
On 31 January 2020, the OECD released a Statement by the Inclusive Framework on the two-pillar approach indicating that the members of the Inclusive Framework affirmed their commitment to reach an agreement on new international tax rules by the end of 2020.7 Attached to the Statement were more detailed documents, including a progress update on Pillar Two.
In October 2020, the OECD released a series of documents with respect to the BEPS 2.0 project, including a detailed Blueprint on Pillar Two.8 In the Cover Statement, the Inclusive Framework expressed the view that while no agreement had been reached yet, the Blueprint provided for a solid basis for future agreement. In January 2021, the OECD hosted a virtual consultation session with stakeholders on the voluminous comments that were submitted on the Blueprints on both Pillar One and Pillar Two.9
On 1 July 2021, the OECD released a Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy (July Statement), reflecting the agreement of 130 of the member jurisdictions of the Inclusive Framework on some key parameters with respect to both pillars.10 At that time, nine members of the Inclusive Framework (Barbados, Estonia, Hungary, Ireland, Kenya, Nigeria, Peru, Saint Vincent and the Grenadines, and Sri Lanka) did not join the July Statement. Barbados, Peru and Saint Vincent and the Grenadines subsequently joined the agreement. At the end of August 2021, Togo joined both the Inclusive Framework and the July Statement.
In October 2021, the OECD published a Statement indicating that the Inclusive Framework agreed on a two-pillar solution to address the tax challenges arising from the digitalization of the economy and providing a timeline for implementation.11 136 jurisdictions of the Inclusive Framework agreed to the Statement. Estonia, Hungary and Ireland, which did not join the July agreement, joined the October Statement. Pakistan, which joined the July statement, did not join the October Statement. Kenya, Nigeria, and Sri Lanka did not join either statement. Mauritania has since become a member of the Inclusive Framework and joined the October Statement, bringing to 137 the total number of jurisdictions participating in the agreement.
Detailed discussion
Pillar Two introduces new global minimum tax rules for multinational enterprises (MNEs) with an agreed rate of 15%. The minimum tax is calculated based on financial accounting standards and relies on two main components: profits and taxes paid. Generally, the rules apply to MNE groups with an annual revenue of €750 million or more.
Pillar Two includes two interlocking rules that together comprise the GloBE rules: i) the IIR, which imposes top-up tax on a parent entity with respect to a low-taxed foreign subsidiary; and ii) the UTPR, which imposes top-up tax through a denial of deductions or other adjustment if the low-taxed income of an entity in the MNE group is not subject to top-up tax under an IIR. Pillar Two also includes the STTR, which is a treaty-based rule that allows source jurisdictions to impose withholding tax on certain related party payments that are subject to tax below a minimum rate.
On 20 December 2021, the OECD released the Pillar Two Model Rules as approved by the Inclusive Framework. The Model Rules define scope and mechanics for the GloBE rules and contain 10 chapters:
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Chapter 1 defines the scope of the GloBE rules.
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Chapter 2 describes the application of the IIR and UTPR and how to allocate the top-up tax.
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Chapter 3 determines the income or loss for the period for each company in the MNE group. This is the first component of the effective tax rate (ETR) calculation.
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Chapter 4 identifies the taxes attributable to each company in the MNE group. This is the second component of the ETR calculation.
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Chapter 5 provides the rules for determining the ETR for a jurisdiction and the top-up tax for constituent entities located in low-tax jurisdictions.
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Chapter 6 contains rules relating to acquisitions, disposals and joint ventures.
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Chapter 7 describes the application of the GloBE rules to tax neutrality and distribution regimes.
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Chapter 8 addresses administrative aspects of the GloBE rules, including information filing requirements and safe harbors.
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Chapter 9 sets out transitional rules.
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Chapter 10 sets out defined terms and concepts used elsewhere in the Model Rules.
Chapter 1 – Scope
Chapter 1 provides the rules for determining the MNE Groups that are in scope of the GloBE rules. It also provides scope exclusions for specified investment-type entities and organizations with special status in their residence jurisdiction.
In scope
Generally, an MNE Group and its Constituent Entities are in scope of the GloBE rules if the annual revenue in the Consolidated Financial Statements of the Ultimate Parent Entity (UPE) is €750 million or more for two out of the four Fiscal Years immediately preceding the tested Fiscal Year. Although not specified in the Model Rules, the October Statement provides that jurisdictions are free to apply the IIR to groups headquartered in their jurisdictions without regard to the threshold.
For this purpose, an MNE Group is a Group that consists of entities located in more than one jurisdiction. A Group is a collection of Entities (i.e., legal persons or arrangements that prepare separate financial accounts) that are related through ownership or control and that either are:
In addition, a stand-alone entity (Main Entity) is considered an MNE Group if it has at least one Permanent Establishment located in another jurisdiction.
A Constituent Entity is an Entity included in a Group or a Permanent Establishment of a Main Entity.
The UPE is the Entity that is at the top of the ownership control chain and that is not owned by another Entity.
Consolidated Financial Statements are financial statements that: (i) are prepared in accordance with International Financial Reporting Standards (IFRS) or the generally accepted accounting principles (GAAP) of a specified country; (ii) are not prepared in line with such a standard but reflect adjustments of items and transactions to prevent any divergences from IFRS of more than €75 million; or (iii) would have been prepared if the Entity were required to prepare statements in accordance with IFRS or a specified GAAP.
Excluded Entities
The Model Rules provide exclusions from the GloBE rules for specified Entities. However, such entities are not excluded for purposes of determining the MNE Group or whether the MNE Group meets the revenue threshold for being in scope of the GloBE rules.
Entities that are excluded regardless of whether they are a UPE are:
Entities that are excluded only if they are the UPE of an MNE Group are:
Entities that are owned by one or more of the Excluded Entities listed above also are excluded if specified ownership thresholds and activity conditions are satisfied.
An election is available to not treat an Entity as an Excluded Entity, subject to a five-year consistency requirement.
Chapter 2 – Charging provisions
Chapter 2 provides rules for determining which entity is liable to any top-up tax and the portion of such top-up tax that is charged to such entity. Specifically, it sets out the mechanics of the IIR and the UTPR.
Mechanics of the IIR
The IIR requires a Parent Entity to pay its Allocable Share of the Top-up Tax with respect to a Low-Taxed Constituent Entity. The IIR includes an ordering rule that operates through a top-down approach, starting with the UPE. If the UPE is not located in a jurisdiction that has implemented the IIR, the highest Parent Entity in the ownership chain that is located in a jurisdiction that has implemented the IIR pays its Allocable Share of the Top-up Tax. A specific rule limits the application of the IIR to Low-Taxed Constituent Entities outside a Parent Entity’s jurisdiction.
An exception to the top-down approach applies in split-ownership situations. A Partially-Owned Parent Entity applies the IIR in priority over its controlling Parent. This ensures that the income of a Low-Taxed Constituent Entity is subject to the IIR without requiring a Parent to apply the IIR with respect to income that it does not entirely own.
A Parent Entity’s Allocable Share of the Top-up Tax under the IIR is based on its Inclusion Ratio, which is effectively determined based on the Parent Entity’s ownership in the Low-Taxed Constituent Entity. If the Parent Entity directly (or indirectly) owns 100% of such entity, its Inclusion Ratio for that entity generally is 100%. In a split-ownership situation, the Inclusion Ratio is determined on a pro-rata basis.
An IIR offset mechanism applies in situations where multiple entities in the chain apply the IIR with respect to a Low-Taxed Constituent Entity. For example, this may be the case if a Partially-Owned Parent Entity is held by two Parents, only one of which applies a Qualified IIR. In such case, the UPE that applies the IIR is required to reduce its allocable share of Top-Up Tax by an amount equal to its share of Top-up Tax imposed at the level of the Partially-Owned Parent Entity.
Mechanics of the UTPR
Under the UTPR, Constituent Entities are denied a deduction (or required to make an equivalent adjustment) resulting in an additional cash tax expense for the amount of the UTPR Top-up Tax allocated to that jurisdiction. This adjustment is applied to the extent possible for the taxable year. If the adjustment is insufficient to cover the full amount of the UTPR Top-up Tax for that year, the difference is carried forward for application in a succeeding taxable year.
The total UTPR Top-up Tax amount is determined using similar mechanics as the IIR. One notable difference between the IIR and the UTPR is that the UTPR does not provide a limitation to Low-Taxed Constituent Entities outside the UTPR jurisdiction. The total UTPR Top-up Tax amount is equal to the Top-up Tax calculated for each Low-taxed Constituent Entity (subject to certain adjustments). However, the Top-up Tax of a Low-Taxed Constituent Entity allocated under the UTPR is reduced by the Top-up Tax that is brought into charge under a Qualified IIR. In many cases this will mean that the UTPR does not result in additional Top-up Tax, unless the ETR in the IIR jurisdiction itself is below 15%.
The amount of UTPR Top-Up Tax that is allocated to a UTPR jurisdiction is calculated by multiplying the total UTPR Top-Up Tax amount by the jurisdiction’s UTPR Percentage. A jurisdiction’s UTPR Percentage is determined on the basis of two factors that reflect the relative substance of the MNE Group in each of the UTPR jurisdictions, with each factor given equal weight:
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The Employee factor is the number of Employees in the UTPR jurisdiction relative to the total for all UTPR jurisdictions.
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The Tangible Assets factor is the Net Book Value of the Tangible Assets in the UTPR jurisdiction relative to the total for all UTPR jurisdictions.
Based on a specific carve-out rule, a jurisdiction is excluded from this calculation if a UTPR Top-up Tax amount allocated to that jurisdiction in the previous year did not result in a corresponding additional cash tax expense. The next year’s UTPR Percentage for such a jurisdiction is deemed to be zero and the employees and tangible assets of the Constituent Entities located in such jurisdiction are excluded from the calculation (unless all jurisdictions have a UTPR Percentage of zero, in which case this rule does not apply).
Chapter 3 – Computation of GloBE Income or Loss
Chapter 3 provides the rules for computing the GloBE income or loss of each Constituent Entity. This computation is a central element of the GloBE rules and plays an important role in the ETR calculation. Financial accounting net income or loss (determined under an acceptable accounting standard) is the starting point for the computation, which is then adjusted under the rules described in the Chapter.
Globe Income or Loss
The computation of the GloBE Income or Loss starts with net income or loss used in preparing the consolidated financial statements of the UPE, before any consolidation adjustments eliminating intra-group transactions, determined based on the accounting standard used by the UPE in such statements.
However, a different accounting standard may be used if the following conditions are all met:
To get from this starting point to GloBE Income or Loss, adjustments are required for:
For the purpose of computing GloBE Income or Loss, the Filing Constituent Entity may elect to substitute the deduction of stock-based compensation allowed for local tax purposes for the amount that was included in the financial accounts, under specified conditions. The election is applicable for five years and must be applied consistently to all Constituent Entities in the same jurisdiction. Transitional measures apply to the election.
Transactions between Constituent Entities located in different jurisdictions must be consistent with the Arm’s-Length Principle and the same transaction amount needs to be recorded in their respective accounts. A loss from a sale or other transfer of an asset between Constituent Entities within the same jurisdiction must be consistent with the Arm’s Length Principle if it is included in the GloBE income.
In the case of assets and liabilities that are subject to fair value or impairment accounting, the Filing Constituent Entity may elect to assess gains and losses by means of the realization principle for purposes of computing GloBE Income. The election would apply for a mandatory period of five years for all Constituent Entities in the jurisdiction.
An annual election is available to make adjustments, with a four-year look-back period, in the case of an overall aggregate gain derived from the disposition of local tangible assets to third parties by the Constituent Entities in a jurisdiction. The ETR and Top-up Tax, if any, for any previous Fiscal Year must be re-recalculated when applying this election.
The UPE may elect to apply a consolidated accounting treatment (for a mandatory period of five years), to transactions between Constituent Entities in the same jurisdiction that are included in a tax consolidation group, to eliminate income, expenses, gains and losses.
The GloBE Income or Loss of a Low-tax Entity excludes expenses attributable to intragroup financing arrangements that are reasonably anticipated not to be included in the taxable income of a High-tax Counterparty over the expected duration of the arrangement.
Specific rules apply to taxes paid by insurance companies that are charged to policyholders and to equity increases and decreases related to Tier One Capital of regulated entities.
Specific adjustments to Financial Accounting Net Income or Loss are required in the case of corporate restructurings and with respect to distribution regimes.
International Shipping Income
Certain income from international shipping and ancillary activities is excluded from GloBE Income or Loss. Qualifying International Shipping Income relates to the transportation of passengers or cargo in international traffic, including the leasing of a ship on a time charter basis (or on a bareboat basis but only if leased to another Constituent Entity). Ancillary activities are specified activities that are performed primarily in connection with the transportation of passengers or cargo in international traffic. The qualifying net income from ancillary activities of all Constituent Entities in a jurisdiction is capped at 50% of such entity’s qualifying net income from international shipping activities.
In order to qualify for the exclusion, a Constituent Entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from within the jurisdiction where the entity is located.
Allocation to Permanent Establishments
Specific rules apply to allocate GloBE Income or Loss between a Permanent Establishment and its head office (the Main Entity).
For this purpose, a Permanent Establishment includes a place of business: (a) that is treated as a permanent establishment in accordance with an applicable tax treaty and taxed in accordance with a provision similar to Article 7 of the OECD Model Tax Convention on Income and Capital; (b) where the income attributable to it is taxed under a jurisdiction’s domestic tax law on a net basis (this includes a deemed place of business); (c) situated in a jurisdiction that has no corporate tax income system, if it would be treated as a permanent establishment under the OECD Model Tax Convention on Income and Capital and taxed on the income attributable to it under Article 7 of that model; or (d) if not described in (a)-(c), through which operations are conducted outside the jurisdiction of the head office, provided that the jurisdiction exempts the income attributable to those operations.
Generally, the net income as reflected in the separate financial accounts of the Permanent Establishment should be followed. Where separate accounts do not exist, then the net income will be the amounts that would have been reflected if the Permanent Establishment had prepared standalone financials in accordance with the UPE’s accounting standard.
The financial accounts will be adjusted, if necessary, to only reflect the income or loss attributable to the Permanent Establishment based on the applicable tax treaty, domestic law or OECD Model Tax Convention (depending on the type of Permanent Establishment), regardless of the actually taxed income.
The net income or loss of a Permanent Establishment generally will not be included in the GloBE Income or Loss of the Main Entity. There is one exception to this rule: when a Permanent Establishment has a loss that is treated as an expense in the income tax calculation of the Main Entity and is not offset against an item of income subject to tax in both the jurisdiction of the Permanent Establishment and the jurisdiction of the Main Entity. In this situation, a recapture rule will apply to income subsequently arising for the Permanent Establishment.
Allocation to Flow-through Entities
Special rules apply for the allocation of income or loss of Flow-through Entities. A Flow-through Entity is an entity that is tax transparent with respect to its income, expense, profit or loss in the jurisdiction where it is created, unless it is tax resident and subject to covered tax on its income and profit in another jurisdiction. Flow-through Entities also include Reverse Hybrid Entities, which are flow-through entities that are not tax transparent in the jurisdiction of their owner.
The income or loss of these entities is first reduced to account for the ownership interest of entities that are not part of the MNE Group. Then the income or loss is allocated to a Permanent Establishment of the Flow-through Entity if the business is carried out through a Permanent Establishment. The remaining income or loss generally is allocated to its owners in accordance with their ownership interests. The calculation is performed separately for each ownership interest. However, if the Flow-through Entity is the UPE or a Reverse Hybrid Entity, the remaining income is allocated to the UPE or the Reverse Hybrid Entity.
Chapter 4 – Computation of Adjusted Covered Taxes
Chapter 4 identifies the taxes attributable to the GloBE income or loss of each Constituent Entity, the so-called “covered taxes.” This is the second component of the ETR calculation. It includes a definition of covered taxes that applies solely for the purposes of the GloBE rules. It also provides specific rules for the allocation of taxes among the constituent entities and mechanisms to address temporary differences.
The computation of Adjusted Covered Taxes is one of the items that has changed significantly from the Pillar Two Blueprint. The major updates from the Blueprint are the use of the current tax expenses accrued for financial accounting purposes as the basis for the computation and the use of deferred tax accounting to address temporary book-tax differences.
Adjusted Covered Taxes
Adjusted Covered Taxes of a Constituent Entity for a Fiscal Year start with the current tax expense accrued in its Financial Accounting Net Income or Loss with respect to Covered Taxes for the Fiscal Year and is adjusted by the following amounts:
The Additions to Covered Taxes of a Constituent Entity is the sum of any amount of:
The Reductions to Covered Taxes of a Constituent Entity is the sum of any amount of:
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Covered Taxes refunded or credited, except for any Qualified Refundable Tax Credit, that were not treated as an adjustment to current tax expense
Definition of Covered Taxes
Covered Taxes means the following four categories of taxes:
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Taxes on distributed profits, deemed profit distributions, and non-business expenses imposed under an Eligible Distribution Tax System
Top-up Tax accrued under a Qualified IIR or a Qualified Domestic Minimum Top-up Tax is excluded from Covered Taxes. Also excluded are taxes attributable to an adjustment as a result of a Qualified UTPR, a disqualified Refundable Imputation Tax, and taxes paid by an insurance company with respect to returns of policyholders.
Allocation of Covered Taxes
Specific rules are provided for the allocation of Covered Taxes from one Constituent Entity to another in order to match such taxes to the GloBE Income to which they relate:
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In the case of a Constituent Entity that is a Hybrid Entity, Covered Taxes of the Constituent Entity-owner on income of the Constituent Entity under the fiscal transparency rule are allocated to the Hybrid Entity
In the case of a Constituent Entity that is a CFC or a Hybrid Entity and that applied the rules above, the Covered Taxes allocated to such entity with respect to Passive Income cannot exceed the Top-Up Tax Percentage for the Constituent Entity’s jurisdiction determined without regard to the Covered Taxes incurred on such Passive Income by the Constituent Entity-owner, multiplied by the Passive Income includible under the CFC Tax Regime or fiscal transparency rule.
The purpose of this limitation is to ensure that an ETR on Passive Income of the Constituent Entity is not higher than the 15% minimum rate. If the ETR on the Passive income of the Constituent Entity is higher than the 15% minimum rate, the ETR on other income of the Constituent Entity and on the income of other Constituent Entities in the same jurisdiction will be increased by the allocation rules. In the absence of this limitation, the Top-up Tax on other income of the Constituent Entity or on the income of other Constituent Entities in the same jurisdiction would be decreased.
Mechanism to address temporary differences
The Model Rules address temporary differences through the Total Deferred Tax Adjustment Amount, which starts with the deferred tax expense accrued in the financial accounts with respect to Covered Taxes. The deferred tax expense reflected in the financial accounts is required to be recast at the 15% minimum rate if the applicable tax rate is above the minimum rate. This deferred tax expense amount then is subject to specified exclusions and adjustments.
The following amounts, if any, are excluded from the Total Deferred Tax Adjustment Amount:
The Total Deferred Tax Adjustment Amount is further adjusted as follows:
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Reduced by any amount that would be a reduction to the Total Deferred Tax Adjustment Amount due to recognition of a loss deferred tax asset for a current year tax loss, where a loss deferred tax asset has not been recognized because the recognition criteria were not met
A deferred tax asset that has been recorded at a tax rate lower than the 15% minimum rate may be recast with the minimum rate in a Fiscal Year such deferred tax asset is recorded, if a taxpayer can demonstrate that the deferred tax asset is attributable to a GloBE Loss.
A recapture rule applies to any deferred tax liability that does not constitute a Recapture Exception Accrual if it is not paid within five years. The recaptured amount is treated as a reduction to Covered Taxes in the Fiscal Year in which it was originally recorded and the ETR and Top-up Tax for such year are recalculated.
Recapture Exception Accrual means the tax expense accrued attributable to changes in associated deferred tax liabilities, in respect of:
The GloBE Loss Election
A Filing Constituent Entity is allowed to make a GloBE Loss Election in lieu of applying the mechanism to address temporary differences. This election is made on a jurisdictional basis.
When the GloBE Loss Election is made, a Filing Constituent Entity calculates the GloBE Loss Deferred Tax Asset for each Fiscal Year with net GloBE Loss in the jurisdiction. The GloBE Loss Deferred Tax Asset is the net GloBE loss in a Fiscal Year multiplied by the 15% minimum rate. The GloBE Loss Deferred Tax Asset for the jurisdiction is carried forward to subsequent Fiscal Years to increase the Covered Taxes for the jurisdiction in a Fiscal Year when it is used.
Post-filing adjustments and tax rate changes
Detailed rules are provided for the treatment of adjustments to Covered Taxes for a previous Fiscal Year recorded in the financial accounts. An increase in Covered Taxes in a jurisdiction is treated as the adjustment of Covered Taxes in the Fiscal Year in which the adjustment is made. On the other hand, a decrease in Covered Taxes in a jurisdiction requires a recalculation of the ETR and Top-up Tax for the previous Fiscal Year when such taxes were included. However, a Filing Constituent Entity may make an annual election to treat an immaterial decrease (i.e., a decrease of less than €1 million for the jurisdiction) as an adjustment of Covered Taxes in a Fiscal Year in which such adjustment is made.
Detailed rules also are provided for the treatment of changes in the domestic tax rate. The deferred tax expense resulting from a decrease in the applicable domestic tax rate is treated as an adjustment to a Constituent Entity’s liability for Covered Taxes for a previous Fiscal Year if such decrease results in a rate that is less than the minimum tax rate. On the other hand, the deferred tax expense, when paid, that has resulted from an increase in the applicable domestic tax rate is treated as an adjustment to a Constituent Entity’s liability for Covered Taxes for a previous Fiscal Year if such amount was originally recorded at a rate less than the 15% minimum rate, and the adjustment is limited to an increase up to the deferred tax expense recast by the minimum rate.
If more than €1 million of the amount accrued by a Constituent Entity as current tax expense and included in Adjusted Covered Taxes for a Fiscal Year is not paid within three years after the end of the Fiscal Year, the ETR and Top-Up Tax for such Fiscal Year must be recalculated by excluding such unpaid amounts.
Chapter 5 – Computation of Effective Tax Rate and Top-up Tax
Chapter 5 provides rules for the computation of ETR and Top-up Tax, using a nine-step methodology:
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Step 1: Aggregating each Constituent Entity’s GloBE Income or Loss with those of other Constituent Entities located in the same jurisdiction
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Step 2: Aggregating each Constituent Entity’s Adjusted Covered Taxes with those of other Constituent Entities located in the same jurisdiction
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Step 3: Dividing the jurisdictional aggregated Adjusted Covered Taxes with the aggregated GloBE Income or Loss to determine an Effective Tax Rate for the jurisdiction
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Step 4: Identifying which jurisdiction is a Low-Tax Jurisdiction (i.e., has an ETR that is below the 15% minimum rate)
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Step 5: Computing a jurisdictional Top-Up Tax Percentage for each Low-Tax Jurisdiction (equal to the positive difference between the minimum rate and the jurisdictional ETR)
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Step 6: Calculation of the Substance based Income Exclusion
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Step 7: Determination of the Excess Profits in that jurisdiction, by reducing the Net GloBE Income in the Low-Tax Jurisdiction by the Substance-based Income Exclusion
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Step 8: Determining the Top-up Tax; and finally
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Step 9: Allocating such Top-up Taxes to the Constituent Entities in the Low-Tax Jurisdiction
An example is provided below to illustrate these steps.
Chapter 5 also includes a de minimis exclusion and special rules for calculating the ETR in respect of Minority-Owned Parent Entities.
Determination of ETR
The jurisdictional ETR of the MNE Group for each jurisdiction is: