globaltaxnews.ey.comSign up for tax alert emailsPrintDownload | ||||||
25 September 2026 OECD/G20 Inclusive Framework releases package of Global Minimum Tax documents
On 11 September 2026, the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) released three documents on the Global Minimum Tax: new guidance on the application of the Global Anti-Base Erosion (GloBE) Model Rules, updates to the GloBE Information Return (GIR) and a framework for the full legislative review process. The new tranche of Administrative Guidance addresses the treatment of Explicitly Conditional Taxes and the use of Local Financial Accounting Standards under a Qualified Domestic Minimum Top-up Tax (QDMTT). The revised GIR incorporates the Side-by-Side Package agreed by the Inclusive Framework in January 2026. These revisions to the GIR are intended to apply only to GIRs filed in respect of Fiscal Years commencing on or after 31 December 2025. It also reflects some clarifications regarding data points contained in the existing GIR. These are relevant for GIRs to be filed in respect of Fiscal Years commencing before 31 December 2025 as well. The Terms of Reference and Methodology for the Full Legislative Review provides a framework for detailed Inclusive Framework peer reviews of implementing jurisdictions' Global Minimum Tax legislation to ensure alignment with the GloBE Model Rules and Commentary. The section below includes the background of the OECD/Inclusive Framework work on the Global Minimum Tax and the documents released in this respect. In October 2021, the OECD released a statement reflecting the high-level agreement of Inclusive Framework member jurisdictions on core design elements of Pillars One and Two of the Base Erosion and Profit Shifting (BEPS) 2.0 project. (See EY Global Tax Alert, OECD releases statement updating July conceptual agreement on BEPS 2.0 project, dated 11 October 2021.) Since the October 2021 agreement was reached, the OECD has released a series of significant documents agreed by the Inclusive Framework on the Global Minimum Tax under Pillar Two, including: the GloBE Model Rules (see EY Global Tax Alert, OECD releases Model Rules on the Pillar Two Global Minimum Tax: Detailed review, dated 22 December 2021); Commentary to the GloBE Model Rules (see EY Global Tax Alert, OECD releases Commentary and illustrative examples on Pillar Two Model Rules, dated 21 March 2022); guidance on GloBE Safe Harbours (see EY Global Tax Alert, OECD/G20 Inclusive Framework releases document on safe harbors and penalty relief under Pillar Two GloBE rules, dated 21 December 2022); and six packages of GloBE Administrative Guidance (see EY Global Tax Alerts OECD/G20 Inclusive Framework releases Administrative Guidance under Pillar Two GloBE Rules: Detailed Review, dated 9 February 2023; OECD/G20 Inclusive Framework releases additional Administrative Guidance on Pillar Two GloBE Rules: Detailed review, dated 21 July 2023; OECD/G20 Inclusive Framework releases additional Administrative Guidance on Pillar Two GloBE Rules and update on Pillar One Amount A timeline, dated 22 December 2023; OECD/G20 Inclusive Framework releases fourth tranche of Administrative Guidance on Pillar Two GloBE Rules, dated 28 June 2024; and OECD releases new documents on GloBE rules and on qualified jurisdiction status, dated 17 January 2025; and OECD releases Side-by-Side Package on Pillar Two Global Minimum Tax: Detailed review, dated 16 January 2026). The OECD has periodically updated the Commentary to incorporate the agreed Administrative Guidance, with the most recent Consolidated Commentary released in May 2026 reflecting all the Administrative Guidance that had been released to date. The OECD also has released the standard template for the GIR and related documents. (See EY Global Tax Alert, OECD/G20 Inclusive Framework releases document on Pillar Two GloBE Information Return, dated 24 July 2023, dated 24 July 2023, and OECD releases new documents on GloBE Information Return, dated 21 January 2025.) In addition, the OECD developed a toolkit to support tax administrations in applying the Global Minimum Tax rules. (See EY Global Tax Alert, OECD releases toolkit to support tax administrations in applying Pillar Two and updates FAQs | EY - Global, dated 12 May 2026.) In June 2024, the OECD released a Question & Answer (Q&A) document providing information regarding the peer review process for determining the qualified status of the elements of the Global Minimum Tax that are implemented by jurisdictions. (See EY Global Tax Alert, OECD/G20 Inclusive Framework releases documents on Pillar One Amount B and Pillar Two, dated 20 June 2024.) In January 2025, the OECD released a Central Record of Legislation with Transitional Qualified Status, listing the jurisdictions that had completed the transitional qualification mechanism process for the Income Inclusion Rule (IIR), Domestic Minimum Top-up Tax (DMTT) or QDMTT and QDMTT Safe Harbour, together with explanatory information, including an update to the Q&A document on the process for determining qualified status. (See EY Global Tax Alert, OECD releases new documents on GloBE rules and on qualified jurisdiction status, dated 17 January 2025.) The OECD has periodically updated both the Q&A document and the Central Record of Legislation with Transitional Qualified Status. The September 2026 Administrative Guidance provides that "Explicitly Conditional Taxes" are not recognized as Covered Taxes. Furthermore, a DMTT would not be a QDMTT if it is an Explicitly Conditional Tax. A tax is an Explicitly Conditional Tax if it either (1) applies only to Constituent Entities in respect of which a Qualified IIR or Qualified Undertaxed Profits Rule (UTPR) applies and that are not eligible for the Side-by-Side (SbS) Safe Harbour or (2) ceases to apply if no Qualified IIR or Qualified UTPR applies to the Constituent Entity or if the SbS Safe Harbour applies. Under the newly issued guidance, Explicitly Conditional Taxes are excluded from the definition of Covered Taxes. This exclusion could reduce the effective tax rate (ETR) calculated for a jurisdiction and increase the likelihood that Pillar Two top-up taxes arise, effectively leading to double taxation. The guidance also states that if the conditionality only applies to a portion of the tax, such as a surcharge, only that portion will be treated as an Explicitly Conditional Tax, provided it is a separate, severable levy or surcharge. Also, a tax is not treated as an Explicitly Conditional Tax solely because it only applies to Constituent Entities in a multinational enterprise (MNE) group that meets a specified revenue threshold. Preexisting taxes will not be treated as an Explicitly Conditional Tax if they were enacted before 30 November 2024, provided that the conditional feature does not apply for any Fiscal Year beginning on or after 1 January 2025. The Administrative Guidance also states that further guidance will follow regarding discriminatory taxes that are not regarded as Covered Taxes. The September 2026 Administrative Guidance also addresses the concern that differences between local accounting periods and the Ultimate Parent Entity's (UPE's) reporting period could prevent an otherwise qualifying QDMTT that uses the Local Financial Accounting Standard (LFAS) from meeting the conditions for the QDMTT Safe Harbour. To apply the LFAS, the same fiscal period as used in the preparation of the Consolidated Financial Statements should be used. The guidance clarifies that this requirement is met if the fiscal period of the Constituent Entity's local financial accounts is the same period as the one used for the Constituent Entity in the preparation of the Consolidated Financial Statements, even if that period is different from the UPE's Fiscal Year. In addition, the fiscal period consistency requirement does not apply to an entity that became or ceased to be a Constituent Entity during the year or the immediately preceding year as a result of an acquisition, disposition, dissolution, merger or similar restructuring. The guidance also allows for a QDMTT to determine the fiscal period in its legislation (the Required QDMTT Fiscal Period), which may be the same as or different from the UPE's Fiscal Year. In those cases, the QDMTT must be calculated using the LFAS, and the QDMTT Safe Harbour applies if the conditions are met for all Required QDMTT Fiscal Periods that begin or end within the UPE's Fiscal Year. As a transitional measure for years beginning on 31 December 2023 or in 2024, the QDMTT Safe Harbour applies if the conditions are met in respect of any Required QDMTT Fiscal Period beginning in 2024, even if the conditions were not met for part of the corresponding UPE Fiscal Year. If the conditions of the QDMTT Safe Harbour are not met solely because of the fiscal period mismatch rules, the QDMTT payable under a Required QDMTT Fiscal Period is allocated to each month based on the income arising in each month and can be considered in the Top-up Tax calculation for a Qualified IIR or a Qualified UTPR. If this is not reasonably practical, the QDMTT payable may be allocated to each month on a pro-rata-tempore basis. This rule is intended to ensure that QDMTT paid in respect of a fiscal period that does not align with the UPE's Fiscal Year is appropriately allocated in the Top-up Tax computation. The GIR is the standardized information return that MNE groups must file under the GloBE Model Rules. This latest update builds on the version published in January 2025 and incorporates the SbS Package released in January 2026.
The revised GIR is only to be used for Fiscal Years commencing on or after 31 December 2025. MNE groups with a calendar-year Fiscal Year will first use this template for their 2026 Reporting Fiscal Year. However, the new explanatory guidance notes included in the revised GIR that provide clarification regarding "existing data points" (i.e., data points already present in the January 2025 GIR) are to be applied for all future GIR filings, including those for Reporting Fiscal Years commencing before 31 December 2025. The GIR updates with respect to the SbS Package incorporation involve the GIR's data points, elections, computations and dissemination rules across multiple sections. A new row (1.3.1.6) is added to the UPE table (Table 1.3.1) in the General Section for the Filing Constituent Entity (CE) to elect the SbS Safe Harbour. Its applicability depends on whether the UPE is located in a jurisdiction with a Qualified SbS Regime, as listed in the Central Record. The heading of Section 1.3 has been updated to "Corporate Structure and Election for the SbS Safe Harbour" and the new option "Qualified SbS Regime" is added to the list of applicable rules reported in the UPE table (row 1.3.1.2).
Notably, even when the SbS Safe Harbour applies, certain entity-level information must still be reported if entities are located in jurisdictions with a QDMTT in force. Status as a Tax-Transparent Entity, Reverse Hybrid Entity, or Hybrid Entity must be reported if one or more (direct or, through a chain of Hybrid Entities or Tax-Transparent Entities, indirect) CE-owners of the entity are located in a QDMTT jurisdiction. The QDMTT jurisdiction needs this information to assess whether cross-border income and taxes were correctly allocated or excluded from its computations.
The SBTI Safe Harbour, unlike other safe harbors that reduce the full Jurisdictional Top-up Tax to zero, only reduces a portion of the Jurisdictional Top-up Tax to zero. This fundamental distinction has implications throughout the GIR, and language that previously assumed all safe harbors eliminate Top-up Tax entirely has been amended.
Special rules govern the interaction between the SBTI Safe Harbour and Qualified Refundable Tax Credits (QRTCs) and Marketable Transferable Tax Credits (MTTCs). When QRTCs or MTTCs are treated as QTIs under the SBTI Safe Harbour, they are excluded from the standard QRTC/MTTC adjustment rows and instead reported through the dedicated QTI rows. QRTCs/MTTCs treated as QTIs that are subsequently refunded must still be reported in the Covered Taxes refund row. A new row captures the tax attributable to QRTCs/MTTCs treated as QTIs. Changes have also been made to the high-level summary table (Section 1.4) relevant to the SBTI Safe Harbour:
The UPE Safe Harbour can only be elected if the UPE jurisdiction is listed in the Central Record as having a Qualified UPE Regime for the Reporting Fiscal Year. A new optional "Qualified UPE Regime" is added to the applicable rules in the UPE table (row 1.3.1.2). Like the Transitional UTPR Safe Harbour, the UPE Safe Harbour reduces to zero the UTPR Top-up Tax amount only with respect to the UPE jurisdiction. The revised GIR introduces a set of new data points for the MNE group to complete regarding government-provided benefits that reduce, refund or credit Covered Taxes, or that reduce the amount of QDMTT payable. The GIR does not define "benefits" or explain how these data points will be used, beyond stating that the anonymized aggregated data collection contemplated as part of the Inclusive Framework's peer review and monitoring process would provide visibility over whether any benefits are provided by jurisdictions that are related to the GloBE Rules or the QDMTT. As noted below in relation to the full legislative review, the Inclusive Framework is separately developing Administrative Guidance and an ongoing monitoring process on the identification of Related Benefits. The explanatory guidance for post-filing adjustments as defined in Article 4.6.1 of the GloBE Model Rules has been clarified with new notes (3.2.1.2.a. 2.k and 3.2.4.2.a. 3.k). The key clarification provides that, when determining the amount to be carried back to prior years, the current tax adjustment for a prior year must be considered together with the deferred tax adjustment (if any) related to the same prior year. The previous language referring to determining whether there is a "net decrease" has been replaced with language focusing on determining "the amount to be carried back," providing greater precision.
This last point is particularly significant: MNE groups that are preparing their GIRs for Fiscal Years beginning in 2024 or 2025 should take into account these new clarifying notes. The Inclusive Framework will continue to develop the administrative framework for the GIR, including:
In an effort to ensure consistency and coordination in the application of the GloBE Rules across different jurisdictions, the Inclusive Framework has developed a peer review process. This process consists of a transitional qualification mechanism, a full legislative review and an ongoing monitoring process with respect to jurisdictions' Global Minimum Tax legislation. The OECD's new document contains the terms of reference against which the full legislative review is conducted, as well as the assessment methodology. The full legislative review is generally expected to be initiated within two years after the effective date of a jurisdiction's legislation or the enactment date of the legislation (whichever is later). Exceptions may apply under certain conditions. Upon completion of the full legislative review, the determination and the effective date of the qualified status will be recorded in the Central Record. Any loss of the qualified status would then apply prospectively to Fiscal Years that begin on or after the effective date specified in the Inclusive Framework's decision regarding such loss. The terms of reference against which the legislative review is conducted are broken down by type of legislation, as follows. A jurisdiction's IIR or UTPR must provide outcomes that are consistent with the GloBE Model Rules, the Commentary and Administrative Guidance. Different drafting approaches are permitted provided they systematically result in equivalent Top-up Tax liabilities, including a consistent scope, Top-up Tax computation and application of the rule order. The legislative review assesses whether legislation is applied in line with Administrative Guidance. Guidance released more than 24 months before the review, and guidance with an approved effective date that has passed, is tested as part of the review. More recent guidance is generally monitored through an ongoing monitoring process. The review assesses whether a jurisdiction's filing requirements for the GIR are in accordance with Articles 8.1 and 9.4 of the GloBE Model Rules and whether the information collected is consistent with the standardized GIR. Jurisdictions should not require more information on their GIR than they would be entitled to receive under the dissemination approach. This could be particularly relevant if a local filing of the GIR is required in certain jurisdictions. The definitions of a Qualified IIR and Qualified UTPR in Article 10.1 of the GloBE Model Rules state that a jurisdiction's legislation will not be eligible to obtain qualified status if the jurisdiction provides benefits related to its rules (Related Benefits). The Inclusive Framework is developing Administrative Guidance and an ongoing monitoring process related to the identification of Related Benefits. Once in place, Related Benefits will be addressed through that process rather than through the full legislative review. Jurisdictions are required to apply the agreed rule order in accordance with the Inclusive Framework's Central Record of qualified rules. Formal recognition of qualified status is not required, provided the jurisdiction respects the Central Record in applying its legislation. A DMTT should be functionally equivalent to the GloBE Rules and reliably produce outcomes that are consistent with the GloBE Model Rules, the Commentary and Administrative Guidance. The DMTT must incorporate the mandatory variations in the QDMTT Commentary, while any differences should be limited to permitted optional variations or inconsistencies that do not systematically result in less Top-up Tax. QDMTT computations should be capable of being made using the data points required to compute the GloBE tax liability. Although the information return may follow a different format from the GIR, reporting requirements are assessed under the same principles applicable to an IIR or UTPR. To qualify for the QDMTT Safe Harbour, the jurisdiction's legislation must meet the Accounting Standard and Consistency Standard in the QDMTT Safe Harbour Commentary. Only acceptable variations identified in the Commentary are permitted, although the Inclusive Framework may expand the list through future Administrative Guidance. A QDMTT Safe Harbour jurisdiction must have information collection and reporting requirements that are consistent with the GloBE Rules and the dissemination approach, including collection of the same GIR data points in the same format. Similar to the QDMTT jurisdiction, a QDMTT Safe Harbour jurisdiction will only be considered to achieve consistent outcomes if it does not provide Related Benefits. The full legislative review covers jurisdictions that have implemented the IIR, UTPR or DMTT, or a combination of these rules in their domestic legislation. Enactment of a corporate income tax or any other tax that qualifies as a Covered Tax for purposes of the GloBE Rules is not in scope of the full legislative review. A jurisdiction cannot participate in the peer review process unless it is an Inclusive Framework member, but exceptions may be made for relevant jurisdictions upon consensus of the Inclusive Framework. The OECD Secretariat will assess the legislation against the Terms of Reference, identify any areas where it is inconsistent with the GloBE Rules, and prepare a preliminary assessment with recommendations and items to be monitored. The preliminary assessment will categorize each item as an inconsistency to be addressed or an item to be monitored. Significant inconsistencies may result in the withdrawal of qualified status with prospective effect. While discussions are ongoing, the legislation will continue to be recognized as having transitional qualified status. The Central Record will confirm completion of the full legislative review, record any loss of qualified status, and include recommendations and the expected date for addressing them. Recommendations and items to be monitored will be subject to ongoing monitoring. Failure to implement a recommendation may result in the revocation of qualified status. Administrative Guidance that was not tested during the review, substantive legislative changes and newly identified inconsistencies will also be monitored. Qualified status confirmed in the full legislative review will continue to be recognized without interruption by other implementing jurisdictions. Any loss of qualified status would apply prospectively for Fiscal Years beginning on or after the relevant date. Qualified status may be recognized retrospectively if legislation is amended and re-obtains qualified status. Full legislative review will be available to all implementing jurisdictions, regardless of the effective date of their domestic legislation. The Inclusive Framework intends to review this process and assess the need for any changes, but not before 31 December 2030. In most jurisdictions, implementation of the newly released Administrative Guidance will require amendments to their domestic legislation. Companies should monitor implementation activity with respect to aspects of the guidance that affect them in the jurisdictions that are relevant to their business. MNE groups will need to ensure that their GIR preparation processes and IT systems can accommodate the new data points, safe harbor elections and Related Benefits reporting. Groups that have already built their GIR processes will need to be prepared to reflect the revised GIR. The new explanatory guidance notes clarifying existing data points and the updated guidance on post-filing adjustments apply immediately to all future GIR filings, including those for Fiscal Years commencing before 31 December 2025. Groups that are in the process of preparing their GIR filings should review these clarifications and take them into account in those filings. The expanded suite of safe harbors (which now reflects 11 options) provides compliance relief but also gives rise to complexity. MNE groups should model the interaction between safe harbors on a jurisdiction-by-jurisdiction basis. The specific operation of the SBTI and UPE Safe Harbours means that full Section 3 computations may still be required even if these safe harbors apply. Upon completion of the full legislative review, the determination and the effective date of the qualified status will be updated in the OECD Central Record. MNE groups should monitor the OECD Central Record and relevant jurisdictional reviews, particularly if qualified status affects the rule order, QDMTT Safe Harbour or Top-up Tax liability. As the Inclusive Framework continues to focus on the Global Minimum Tax, additional Administrative Guidance and other policy and procedural developments are expected, including the potential for further releases before the end of 2026. Companies should watch for announcements from the OECD and may want to consider engaging with the OECD Secretariat and policymakers in the jurisdictions where they operate to provide input and feedback.
Document ID: 2026-2059 | ||||||
