ITQ(GloBE) (List) | stevetowers.tax 8/14

International Tax Quiz (ITQ)

GloBE rules series

Source material

The questions and answers are based on:

GloBE model rules released by the Inclusive Framework
Commentary to the GloBE model rules
GloBE Implementation Framework
Administrative Guidance to the GloBE model rules

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Numbering system

There are currently more than 240 ITQs. They are arranged in 2 series:

GloBE rules series (ITQ G-001, ITQ G-002, etc.)
Tax treaty series (ITQ T-001, ITQ T-002, etc.)

ITQ G-

077

Key Issues:

QDMTT payable
QDMTT challenged under tax stabilization agreement
Art. 5.2.3
Contingent liability vs. tax expense
IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), paras. 37 & 86
Para. 20.1 of Comm to Art. 5.2.3: “accrued”
Allocation of cap (under tax stabilization agreement) between corporate income tax and QDMTT

Date uploaded:

November 10, 2023

ITQ G-

075

Key Issues:

STTR
Art. 1(6)(a) (STTR): “preferential adjustment”
Art. 1(6)(b)(ii) (STTR): “permanent reduction”
Unrepatriated foreign source income is exempt in residence jurisdiction
3 year rule in Art. 1(6)(b)(ii) (STTR): impact on time withholding tax paid
STTR tax = “Covered Tax” (GloBE rules)
Art. 4.6.1 (GloBE rules) – increase in liability for Covered Tax for previous Fiscal Year

Date uploaded:

October 27, 2023

ITQ G-

073

Key Issues:

Art. 4.3.2(e)
Allocation of taxes on distributions: GloBE rules vs. QDMTT
Dividend withholding tax vs. corporate income tax in shareholder jurisdiction
Para. 118.30 of Comm on definition of “QDMTT” in Art. 10.1.1 (as amended by July 2023 AG)

Date uploaded:

October 6, 2023

ITQ G-

071

Key Issues:

July 2023 AG, chapter 3: Leases
Operating leases
Tangible asset carve-out for lessor
Mixed use asset: lease of part of building
Para. 43.1.7 of Comm to Art. 5.3.4
Lessee does not recognize right-of-use asset in financial statements
Para. 43.1.1 of Comm to Art. 5.3.4
Lease to local PE of non-resident company
Para. 43.1.5 of Comm to Art. 5.3.4

Date uploaded:

September 22, 2023

ITQ G-

069

Key Issues:

July 2023 AG, chapter 2
Tax credit
Originator
Marketable Transferable Tax Credit, MTTC
Legal transferability standard
Marketability standard
Para. 112.1 in Comm to Art. 3.2.4
Para. 112.5 in Comm to Art. 3.2.4
Amended para. 5 of Comm to Art. 4.1.2(d)
Purchaser of tax credit
MTTC in purchaser’s hands
Para. 112.6 in Comm to Art. 3.2.4
GloBE Income
Non-MTTC in purchaser’s hands
Para. 14.2 of Comm to Art. 4.1.3(c)
Adjusted Covered Taxes
Amended para. 113 of Comm to Art. 3.2.4
Para. 14.3(b) of Comm to Art. 4.1.3(c)

Date uploaded:

September 8, 2023

ITQ G-

067

Key Issues:

July 2023 AG, chapter 2
Tax credit
Originator
Marketable Transferable Tax Credit, MTTC
Legal transferability standard
Marketability standard
Para. 112.1 in Comm to Art. 3.2.4
Para. 112.5 in Comm to Art. 3.2.4
Amended para. 5 of Comm to Art. 4.1.2(d)
Non-MTTC
Para. 14.2 of Comm to Art. 4.1.3(c)
GloBE Income, Adjusted Covered Taxes
Amended para. 113 of Comm to Art. 3.2.4
Para. 14.3(b) of Comm to Art. 4.1.3(c)

Date uploaded:

August 18, 2023

ITQ G-

076

Key Issues:

Art. 6 vs. Art. 7, OECD model double tax treaty
“PE” definition in Art. 5, OECD model double tax treaty
“PE” definition in Art. 10.1.1, GloBE rules – para. (a) not satisfied, because Art. 6 is not similar to Art. 7
“Constituent Entity”: Art. 1.3.1
QDMTT
Para. 118.4 of Comm to definition of “QDMTT” in Art. 10.1.1

Date uploaded:

November 3, 2023

ITQ G-

074

Key Issues:

QDMTT
Art. 8 of OECD model double tax treaty
Operation of aircraft in international traffic
Treaty exemption in source country under Art. 8 of treaty: applicable to QDMTT? – definition of “Covered tax” in Art. 2(1) of treaty
Para. (a) vs. para. (d) of “permanent establishment” definition in Art. 10.1.1
Stateless PE (Art. 10.3.3(d)); “Stateless Constituent Entity” (Art. 10.1.1)
Para. 118.1 of Comm to definition of “QDMTT” in Art. 10.1.1 (introduced by July 2023 AG)

Date uploaded:

October 20, 2023

ITQ G-

072

Key Issues:

Flow-through Entity
Tax Transparent Entity
POPE
IIR
QDMTT
Para. 118.8.3 of Comm to Art. 10.1.1 definition of “QDMTT”
Arts. 3.5.1, 3.5.3 & 3.5.5: allocation of Financial Accounting Net Income and Loss
Art. 4.3.2(b): allocation of Covered Taxes
Jurisdictional blending for QDMTT purposes

Date uploaded:

September 29, 2023

ITQ G-

070

Key Issues:

July 2023 AG, chapter 3: Leases
Operating leases
Tangible asset carve-out for lessor
Lessee’s right-of-use asset
Para. 43.1.5 of Comm to Art. 5.3.4
Leased asset located in different jurisdiction from lessor
Elimination of intercompany leases

Date uploaded:

September 15, 2023

ITQ G-

068

Key Issues:

July 2023 AG, chapter 2
Tax credit
Originator
Marketable Transferable Tax Credit, MTTC
Legal transferability standard
Marketability standard
Para. 112.1 in Comm to Art. 3.2.4
Para. 112.5 in Comm to Art. 3.2.4
Amended para. 5 of Comm to Art. 4.1.2(d)
Purchaser of tax credit
MTTC in purchaser’s hands
Para. 112.6 in Comm to Art. 3.2.4
GloBE Income

Date uploaded:

August 25, 2023

ITQ G-

066

Key Issues:

Art. 9.1.3
GloBE carrying value
Purported “step-up” transaction prior to Transition Year: GloBE Income is not impacted, but Adjusted Covered Taxes are reduced (due to tax base step-up) – thus, ETR is reduced
Para. 10.1 of Comm to Art. 9.1.3 (added by Feb23 AG, section 4.3.3)
Comparison with status quo

Date uploaded:

August 11, 2023