GloBE Rules Series

ITQ G-

145

October 6, 2025

Question

XCo, a company located in jurisdiction X, is the UPE of an MNE Group which is “within scope” of the GloBE rules.

XCo directly owns 100% of YCo, 55% of ZCo, and 100% of ACo, respectively located in jurisdictions Y, Z, and A. These 4 companies are the only companies in the MNE Group.

YCo directly owns 40% of ZCo. The remaining 5% ownership interests of ZCo are owned by minority shareholders.

Jurisdictions Y and A have implemented the GloBE rules (IIR and UTPR). Jurisdictions X and Z have not implemented the GloBE rules. In particular, jurisdiction Z has not implemented a QDMTT.

ZCo has Top-up Tax of 1,000.

Based on this information, what is the IIR or UTPR tax liability of: (1) XCo; (2) YCo; and (3) ACo?

Answer

Assumptions: (i) None of the companies is an Investment Entity (definition in Art. 10.1.1). (ii) The MNE Group is not in the initial phase of its international activity (see Art. 9.3).

XCo’s IIR or UTPR tax liability is nil, as jurisdiction X has not implemented the GloBE rules.

YCo is an Intermediate Parent Entity (definition in Art. 10.1.1).

YCo is liable to pay an IIR tax equal to its Allocable Share of ZCo’s Top-Up Tax (Art. 2.1.2). YCo’s Allocable Share is 400 (Art. 2.2).

The UTPR is able to apply, because all of XCo’s 95% direct and indirect Ownership Interests in ZCo are not owned by one or more Parent Entities that are required to apply a Qualified IIR (Art. 2.5.2). The UTPR Top-Up Tax Amount is 600 (Art. 2.5.3).

Jurisdictions Y and A are UTPR Jurisdictions (definition in Art. 10.1.1). The 600 of UTPR Top-Up Tax Amount is allocated between jurisdictions Y and A based on their relative number of employees and tangible assets (Art. 2.6.1).

Thus, final answer: (1) Nil; (2) YCo: 400 + allocated share of 600; (3) ACo: allocated share of 600.

Do you agree?

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