GloBE Rules Series

ITQ G-

146

October 17, 2025

Question

X Co is a Constituent Entity of an MNE Group which is “within scope” of the GloBE rules.

Y Co is unrelated to X Co.

Y Co has 10,000 common shares on issue that carry an equal right to profit distributions and capital. X Co acquires 200 common shares in Y Co on 1 July in Year 1 and acquires an additional 100 common shares in Y Co on 31 March in Year 2. Y Co has only one class of shares and distributes a dividend of EUR 0.10 per share on 31 December of Year 2.

What is the treatment, under the GloBE rules, of the dividend received by X Co?

Answer

XCo’s shareholding in YCo is a “Portfolio Shareholding” (definition in Art. 10.1.1).

At the date of the dividend distribution (31 December in Year 2), XCo has held 100 shares in YCo for less than one year. Thus, those 100 shares qualify as a “Short-term Portfolio Shareholding” (definition in Art. 10.1.1). The remaining 200 shares (which have been held for more than one year) do not so qualify.

Therefore, the dividend received by XCo on the 200 shares qualifies as “Excluded Dividends” (definition in Art. 10.1.1). The dividend on the remaining 100 shares does not so qualify.

Therefore, the dividend received by XCo on the 200 shares (i.e., EUR 0.10 x 200 = EUR 20) is excluded from XCo’s GloBE Income (Art. 3.2.1(b)). The remaining dividend (i.e., EUR 0.10 x 100 = EUR 10) will be taken into account in computing XCo’s GloBE Income.

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