On 17 July 2023 the OECD published details of the contents of the GloBE information return (GIR) under Pillar Two.
The GIR is designed to collect the information needed by the tax administration to arrive at an appropriate risk assessment and to evaluate the Top-up Tax liability of the constituent entity. The GloBE Rules provides an outline of the information items to be included in the GIR and leave room for the GIR to be further specified, expanded or simplified. The standard template for the GIR as now agreed by the Inclusive Framework on BEPS is set out in the latest document.
The GIR has been finalised following a public consultation in March 2023 and consideration of the feedback received. The GIR is a standardised information return assisting compliance with and administration of the GloBE Rules. In response to feedback, the return incorporates transitional simplified reporting requirements that are designed for reporting the GloBE calculations at a jurisdictional level. There will be coordinated filing and exchange mechanisms so multinationals can report their GloBE computations on a single return. More detailed information will then be available to the jurisdictions where the multinational may have a top-up tax liability.
The return contains a general section applicable to the whole multinational; and jurisdictional sections that must be completed for every jurisdiction where the multinational operates, using a standard template.
In the general section, the multinational should supply information about the whole group, summarising its corporate structure and noting which constituent entity is completing the GIR. There is a summary table giving an overview of the application of the GloBE Rules to each jurisdiction where the multinational operates.
In the jurisdictional sections the multinational should complete the template for each jurisdiction in which it operates, making limited information disclosures where relevant for jurisdictions where safe harbours and exclusions are applicable. For other jurisdictions the multinational must report its effective tax rate (ETR) computations, showing the computation of any top-up tax where applicable, and setting out the allocation of tax where this is due.
The jurisdictional sections are also to be used to report the calculations performed under a Qualified Domestic Minimum Top-up Tax (“QDMTT”) regime, if this fulfils the conditions to be considered as a safe harbour.
The transitional simplified jurisdictional reporting framework would be applicable for a transitional period for fiscal years on or before 31 December 2028 but would not apply to any fiscal year ending after 30 June 2030. This is intended to allow time for multinationals to develop the accounting systems and processes to collect the required information for reporting GloBE data on an entity-by-entity basis.
When the transitional period ends, multinationals within the scope of the rules are expected to have adapted their IT and accounting systems to allow reporting at the entity level. They will then be required to report GIR information on an entity-by-entity basis for each jurisdiction where they operate.
