GloBE impact of tax residence change

GloBE location: Art. 10.3.1 and Art. 10.3.6

Art. 6.3.4 applicable

Impact on GloBE Income and GloBE carrying value if Art. 6.3.4 election is made

Art. 6.2.2: sale of shares, treated as sale of assets for tax purposes

Art. 6.3.1

Para. 72 of Comm to Art. 6.3.1: acquirer’s GloBE carrying value – meaning of “to the extent”

Divergence between GloBE and accounting carrying values

Impairment: impact on GloBE carrying value and tangible asset carve-out under Substance-based Income Exclusion

Para. 68.5 of Comm to Art. 4.4

Paras. 49 & 50.1 of Comm to Art. 5.3.5

“Intragroup Financing Arrangement” (defined in Art. 10.1.1)

Art. 3.2.7 does not apply if lender is located in “Low-Tax Jurisdiction” and its Top-up Tax is significantly reduced by Substance-based Income Exclusion

Deferred tax liability (DTL) recapture rule

Paras. 90.30 & 90.31 of Comm to Art. 4.4.4 and Example 4.4.4-4 in the June 2024 AG

Reversals allocated to pre-Transition Year DTLs

Outstanding Balance, Maximum Justifiable Amount, Unjustified Balance, Unjustified Balance (yearly movement)

FIFO methodology

Impact on Top-up Tax computations

Deferred tax liability (DTL) recapture rule

Paras. 90.22 & 90.23 of Comm to Art. 4.4.4 and Example 4.4.4-2 in June 2024 AG

Outstanding Balance, Maximum Justifiable Amount, Unjustified Balance, Unjustified Balance (yearly movement)

FIFO methodology

Impact on Top-up Tax computations

Banks / other financial entities

Revenue threshold test in Art. 1.1.1

Gross interest income vs. net interest income: which do you count, when both are shown in income statement?

Para. 10.5 of Comm to Art. 1.1.1

IF's Guidance on CbC Reporting

Sale of shares – Art. 6.2.2 does not apply

Example 6.2.1(e)-1 in IF’s Examples document

Art. 6.2.1(c)

Art. 6.2.1(e)

Carrying value for purposes of tangible asset carve-out in SBIE

GloBE carrying value

Art. 3.2.3: transfer pricing

Example in para. 104.2 of Comm to Art. 3.2.3

Divergence between GloBE and accounting carrying values

Tangible asset carve-out under Substance-based Income Exclusion

Deferred tax liability (DTL) recapture rule

Paras. 112.1 to 112.6 of Comm to Art. 4.4.7 and Examples 4.4.7-1 to 3 in the June 2024 AG

Reversals allocated to pre-Transition Year DTLs

Unclaimed Accruals Annual Election

Exclusion of unclaimed DTL accruals

Outstanding Balance, Maximum Justifiable Amount, Unjustified Balance, Unjustified Balance (yearly movement)

FIFO methodology

Impact on Top-up Tax computations

Deferred tax liability (DTL) recapture rule

Paras. 90.22 & 90.23 of Comm to Art. 4.4.4 and Example 4.4.4-3 in the June 2024 AG

Outstanding Balance, Maximum Justifiable Amount, Unjustified Balance, Unjustified Balance (yearly movement)

LIFO methodology

Impact on Top-up Tax computations

Deferred tax liability (DTL) recapture rule

Paras. 90 to 90.11 of Comm to Art. 4.4.4 (amended / introduced by June 2024 AG)

General ledger (GL) accounts: (1) which are excluded from DTL recapture rule; or (2) which cannot be part of an Aggregate DTL Category