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International Tax Quiz (ITQ)
GloBE rules series
Go to Tax treaty series
Source material
The questions and answers are based on:
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GloBE model rules released by the Inclusive Framework
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Commentary to the GloBE model rules
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GloBE Implementation Framework
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Administrative Guidance to the GloBE model rules
Your comments are very welcome!
I believe in continuous improvement! All your comments (positive and negative!) will be gratefully received – I will take these comments into account in future updates. Please send your comments to: contact@stevetowers.tax. Thank you!
Numbering system
There are currently more than 240 ITQs. They are arranged in 2 series:
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GloBE rules series (ITQ G-001, ITQ G-002, etc.)
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Tax treaty series (ITQ T-001, ITQ T-002, etc.)
ITQ G-
091
Key Issues:
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
Date uploaded:
March 8, 2024
ITQ G-
085
Key Issues:
Transitional CbCR Safe Harbour – de minimis test
Hybrid Arbitrage Arrangement
Paras. 74.25 to 74.31 of “Safe Harbours and Penalty Relief” report, added by December 2023 AG
Was loan entered into after 15 December 2022?
Meaning of “performance … differs” in para. 74.30(c)(ii)
Floating interest rate
Date uploaded:
January 19, 2024
ITQ G-
083
Key Issues:
QDMTT: amount of DMTT tax cannot be “scaled down” to reflect UPE’s Ownership Interest of less than 100% - i.e., DMTT tax must be either 100% or 0%, to “qualify” as QDMTT
Para. 118.10 of Comm to “QDMTT” definition in Art. 10.1.1 (added to Comm by Feb 2023 AG)
UTPR: amount of UTPR tax cannot be “scaled down” to reflect UPE’s Ownership Interest of less than 100%
Arts. 2.5 and 2.6
Date uploaded:
January 5, 2024
ITQ G-
090
Key Issues:
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
Date uploaded:
March 1, 2024
ITQ G-
088
Key Issues:
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
Date uploaded:
February 16, 2024
ITQ G-
086
Key Issues:
Partnership – definitions of “Entity” (Art. 10.1.1), “Flow-through Entity” (Art. 10.2.1), “Tax Transparent Entity” (Art. 10.2.1(a)), “stateless Entity” (Art. 10.3.2(b)), “Constituent Entity” (Art. 1.3.1(a))
Permanent Establishment – para. (a) of definition in Art. 10.1.1
Location of PE (Art. 10.3.3(a))
PE can have payroll carve-out (Art. 5.3.3) and tangible asset carve-out (Art. 5.3.4)
Allocation of FANIL to PE (Arts. 3.4 & 3.5.1(a))
Allocation of Adjusted Covered Taxes to PE (Art. 4.3.2(a))
SBIE computation
Date uploaded:
January 26, 2024
ITQ G-
084
Key Issues:
IIR tax imposed on UPE and POPE
Art. 2.1.6
Top-up Tax of Constituent Entity located in same jurisdiction as UPE or POPE, respectively
Top-up Tax of UPE or POPE, respectively
EU GloBE Directive, Arts. 8(2), 9(3), and 10
Possible drafting glitch in Art. 10, EU GloBE Directive – cf. Art. 2.3, GloBE model rules
Date uploaded:
January 12, 2024