Tangible asset carve-out in Substance-based Income Exclusion: impact of date on which assets acquired

For calendar year Fiscal Year, impact on tangible asset carve-out of asset acquisition on 1 December vs. 28 February

QDMTT

No allocation of CFC tax for QDMTT purposes, for either subsidiary’s computation or parent’s computation: paras. 118.28 & 118.30 of Comm to definition of “QDMTT” in Art. 10.1.1

Transfer pricing

Art. 3.2.3

Para. 99 of Comm to Art. 3.2.3

Art. 4.6.1

Bilateral APA

Material decrease in Covered Tax in a previous fiscal year

Additional Current Top-up Tax

Art. 5.4.1

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

Hybrid Entity (defined in Art. 10.2.5)

No allocation of tax from Hybrid Entity owner to Hybrid Entity, for QDMTT purposes: para. 118-30 of Comm to Art. 10.1.1 definition of “QDMTT”

Corporate income tax imposed on Hybrid Entity owner generally does not qualify for that owner’s QDMTT purposes: paras. 118.28 & 118.29 of Comm to Art. 10.1.1 definition of “QDMTT”

Passive Income (defined in Art. 10.1.1)

Hybrid Entity

Allocation of tax from owner’s jurisdiction to Hybrid Entity’s jurisdiction

Simplified ETR computation under Transitional CbCR Safe Harbour

ETR computation under GloBE rules

Art. 4.3.2(d) & (e)

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