GloBE Rules Series

ITQ G-

152

January 23, 2026

Question

The UPE of an MNE Group is located in jurisdiction U, which has a Qualified SbS Regime.

The group makes an election for the SbS Safe Harbour in its GIR. That GIR is shared with all countries where the group operates.

However, a subsidiary (XCo) has an unrecognised PE in jurisdiction Y. There are no other Constituent Entities in jurisdiction Y. Consequently, the GIR is not shared with jurisdiction Y. Some years later, the PE is asserted by jurisdiction Y.

Is the SbS Safe Harbour effective in jurisdiction Y? If not, and if jurisdiction Y has enacted the UTPR, is it possible for the group have a UTPR liability in jurisdiction Y?

Answer

Q1: Is the SbS Safe Harbour (SbS SH) effective in jurisdiction Y?

For the SbS SH to be effective in jurisdiction Y, an election must be filed with the jurisdiction Y tax authorities.

The process for filing that election is via the sharing of the GIR.

Neither the GloBE rules nor the SbS Package identifies a deadline for filing the election. Presumably, the jurisdiction Y tax law which enacts the GloBE rules specifies a deadline. Based on the facts in this question, it is likely that that deadline has been breached.

If this is the case, then the SbS SH is not effective in jurisdiction Y.

Q2: If not, and if jurisdiction Y has enacted the UTPR, is it possible for the group to have a UTPR liability in jurisdiction Y?

In the absence of the SbS SH, the MNE Group might have UTPR liabilities in respect of Top-up Tax relating to multiple jurisdictions, including jurisdiction U. How much of those UTPR liabilities would be able to be levied on the PE in jurisdiction Y?

Not the full amount, even though the SbS SH is effective in all the other foreign jurisdictions where the group operates. The allocation formula in Art. 2.6.1 is not adjusted to reflect the fact that the SbS SH is effective in many jurisdictions. Thus, jurisdiction Y’s allocation would be based on its proportionate number of employees and tangible assets. See also the footnote on page 85 of the SbS Package.

Do you agree?

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