Transfer pricing

Art. 3.2.3

Unilateral TP adjustment in one jurisdiction

Para. 101 vs. para. 103 of Comm to Art. 3.2.3

Para. 101: “nominal tax rate” vs. GloBE ETR

Para. 101 definition of “under-taxed jurisdiction”

Transfer pricing

Art. 3.2.3

Paras. 101 & 103 of Comm to Art. 3.2.3

Unilateral TP adjustment in under-taxed jurisdiction: no adjustment to GloBE Income

Impact on Adjusted Covered Taxes, and thus on ETR

Allocation of blended CFC taxes

Para. 58.6.1 in Comm to Art. 4.3.2

GloBE Jurisdictional ETR

Minority-Owned Constituent Entity (MOCE): separate calculation of ETR: Art. 5.6.2

Blending groups

Qualified Refundable Tax Credit (QRTC)

Non-Qualified Refundable Tax Credit (NQRTC)

Can QRTC cause larger increase in Top-up Tax than NQRTC?

Substance-based Income Exclusion (SBIE) as proportion of GloBE Income

Transitional CbCR Safe Harbour

De minimis test

Preference shares

“Deduction / non-inclusion arrangement” definition in para. 74.27 of Safe Harbours and Penalty Relief (SHPR) report, as amended by December 2023 AG

“Hybrid arbitrage arrangement”: para. 74.25, SHPR report

Impact on payer: para. 74.26, SHPR report

Impact on recipient: para. 74.16-17, SHPR report

Difference between treatment in CbC Report and treatment in De minimis test

Transitional CbCR Safe Harbour

Qualified CbC Report

Inclusion of purchase price accounting (PPA) adjustments

Consistent reporting condition: para. 17.4 of Safe Harbours and Penalty Relief report, as amended by December 2023 AG

Inclusion of deferred tax expenses related to PPA adjustments

Transfer pricing

Art. 3.2.3

Para. 101 of Comm to Art. 3.2.3

Cross-border transaction between 2 Constituent Entities, the ETRs of which (before any adjustment under Art. 3.2.3) were 15%

Unilateral TP adjustment in one jurisdiction: impact on GloBE Income, Adjusted Covered Taxes, and ETR of each Constituent Entity

Allocation of blended CFC taxes

Paras. 58.6.2 and 58.7 in Comm to Art. 4.3.2

GloBE Jurisdictional ETR

Non-GloBE Entity (not Constituent Entity, Joint Venture, or JV Subsidiary)

Joint Venture: separate calculation of ETR: Art. 6.4

Blending groups

Computation of annual revenue for purposes of Art. 1.1.1

Section 3.1 of December 2023 AG

Para. 10.4 in Comm to Art. 1.1

Gains and losses from investments

Extraordinary or non-recurring items

Interest income: para. 10.6 in Comm to Art. 1.1

Transitional CbCR Safe Harbour

Simplified ETR test

Treatment of CFC tax for purposes of Simplified ETR test

No allocation under Art. 4.3.2

Para. 74.23, Safe Harbours and Penalty Relief report, as amended by December 2023 AG

Recharge of CFC tax from parent to CFC: impact on each of parent and CFC, for purposes of Simplified ETR test

“Covered Tax” definition in Art.4.2.1

Transitional CbCR Safe Harbour

De minimis test

Year-end transfer pricing adjustments not permitted to be made to Qualified Financial Statements

Para. 74.15, Safe Harbours and Penalty Relief report, as amended by December 2023 AG

“Covered Tax” definition in Art. 4.2.1

Extra-profit tax (EPT)

Comm on Art. 4.2.1: defines “tax” as “compulsory unrequited payment to General Government”

Meaning of “unrequited”

EPT reduces company’s other tax liabilities: is EPT “unrequited”?