On 15 January 2025, A key part of the OECD/G20 BEPS Project addressed the tax challenges arising from the digitalisation of the economy. In October 2021, over 135 jurisdictions joined a ground breaking plan to update key elements of the international tax system which is no longer fit for purpose in a globalised and digitalised economy.
The Global Anti-Base Erosion Rules (GloBE) are a key component of this plan and ensure large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate.
The OECD has released updates to the following:
The GloBE Information Return sets out a standardised information return to facilitate compliance with and administration of the GloBE Rules. The GIR was released by the Inclusive Framework on BEPS in July 2023. This version incorporates clarifications on how to complete the GIR and reflects the Administrative Guidance released in December 2023 and June 2024. This version also includes a template that could be used to notify jurisdictions that they will receive the GIR through exchange of information.
In October 2021 members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework) agreed a two-pillar solution to reform the international tax framework in response to the challenges of digitalisation of the economy. As part of the October Statement, Inclusive Framework members agreed to a coordinated system of Global anti-Base Erosion (GloBE) rules that are designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each jurisdiction where they operate. In the October Statement, it was agreed that the GloBE Rules would have the status of a common approach. Under this common approach, jurisdictions are not required to adopt the GloBE rules, but, if they choose to do so, they will implement and administer the rules in a way that is consistent with the agreed outcomes. The common approach also means that Inclusive Framework members accept the application of the GloBE rules applied by other members, including agreement as to rule order and the application of any agreed safe harbours.
3. Qualified Status under the Global Minimum Tax – Q&A
The key questions included in these section are as follows:
- Are jurisdictions required to adopt the Global Minimum Tax?
- Why do the rules need to be qualified for purposes of the Global Minimum Tax?
- Why is the peer review used to recognise the qualified status?
- How is the peer review conducted?
- What is the purpose of the transitional qualification mechanism?
- Which rules can be considered as qualified under the transitional qualification mechanism?
- When does the transitional qualified status apply? When does it stop?
- Is it possible to prepare a self-certification based on draft legislation?
- Can an implementing jurisdiction’s legislation lose the transitional qualified status? What are the consequences for MNE Groups?
- Does the Inclusive Framework publish a compilation of jurisdictions’ legislation with transitional qualified status?
These updates aim to enhance clarity and support the consistent implementation of the GloBE rules. As a cornerstone of the OECD’s efforts, these rules are designed to promote a fairer and more transparent global tax system.
