| Status | Enacted Law |
| Law | Income Tax (Approved International Agreements) (Implementation) (OECD Pillar Two GloBE Model Rules) Regulations, 2024 issued on November 26, 2024 |
| Effective Date | Financial years beginning on or after January 1, 2025 |
| IIR | Yes (2025) |
| UTPR | No |
| QDMTT | Yes (2025) |
| Filing Deadlines | Standard |
| Safe Harbours | All transposed from the OECD Safe Harbour/Administrative Guidance (where relevant). |
On November 26, 2024, Guernsey issued the Income Tax (Approved International Agreements) (Implementation) (OECD Pillar Two GloBE Model Rules) Regulations, 2024 to transpose the OECD Model Rules into domestic law
OVERVIEW
On November 26, 2024, the Guernsey issued the Income Tax (Approved International Agreements) (Implementation) (OECD Pillar Two GloBE Model Rules) Regulations, 2024 (‘the Regulations’) to transpose the OECD Model Rules (and accompanying guidance) into domestic Regulations. The Regulations are issued under Section 75CC(1C) of the Income Tax (Guernsey) Law, 1975 and are very similar to the legislation introduced in the Isle of Man.
Section 1 of the Regulations states that its purpose is to give legal effect in Guernsey to the GloBE Rules to implement:
-an income inclusion rule (IIR) (referred to in the Regulations as a Multinational Top-up Tax or ‘MTT’) that is intended to be a Qualified IIR;
-a minimum tax that is intended to be a Qualified Domestic Minimum Top-up Tax (QDMTT) (referred to in the Regulations as a Domestic Top-up Tax or DTT).
The Regulations do not give legal effect in Guernsey to the under-taxed profits rule (‘UTPR’).
The provisions of the Regulations apply to fiscal years that commence on or after January 1, 2025.
The approach taken in the Regulations is to incorporate by reference the OECD Model Rules and accompanying Commentary/Guidance to effectively transpose the OECD Rules into domestic law (subject to specified amendments).
It achieves this in a number of ways:
Section 1(3) of the Regulations states the GloBE Model Rules shall extend to Guernsey and have the same force and effect as regulations made under the Law
Section 58 of the Regulations states that any reference in square brackets in the OECD GloBE Rules that invites the insertion of the name of an implementing jurisdiction must be construed as if those square-bracketed words were replaced with “Guernsey”.
Section 2 of the Regulations states that the provisions of the Regulations on the IIR and QDMTT must be read and construed in accordance with the GloBE Commentary, the Administrative Guidance, OECD Safe Harbour Rules and the OECD Examples.
This is reiterated in Section 69(4) which states that the provisions of the GloBE Rules must be applied consistently with the most recent:
• GloBE Commentary;
• GloBE Administrative Guidance;
• GloBE Safe Harbours; and
• GloBE Examples
that have been applied in Guernsey before the start of the Fiscal Year that is being considered. The OECD GloBE rules apply to the extent that any provision of those Rules is not expressly stated in the Regulations to be inapplicable.
The GloBE Administrative Guidance is defined in Section 2(2) to include:
• The February 2023 OECD Administrative Guidance;
• The July 2023 OECD Administrative Guidance;
• The December 2023 OECD Administrative Guidance;
• The June 2024 OECD Administrative Guidance;
• Any other document promulgated by the OECD and prescribed by regulations in Guernsey
Part III states that each Domestic Constituent Entity/JV is liable to pay MTT under the IIR determined in accordance with the GloBE Rules for each Fiscal Year of the Qualifying MNE Group that includes the Domestic Constituent Entity.
The only aspects of the OECD Model Rules that are not applicable for the IIR/MTT calculation are the provisions relating to the UTPR (including the exclusion for MNE Groups in the initial phase of their international activity).
There is an exception to the general transposition of the OECD Model Rules and other guidance for any amendments to the definition of “minimum rate” in Article 10.1.1 of the GloBE Model Rules.
The OECD Commentary, including OECD Administrative Guidance is taken into account under Section 2 of the Regulations when applying the Pillar Two GloBE Rules.
Section 2(4) and Section 69(4) of the Regulations states that in applying the IIR(MTT) and QDMTT (DTT) the provisions of the GloBE Rules must be applied consistently with the most recent:
• GloBE Commentary;
• Administrative Guidance;
• Safe Harbours; and
• Examples
that have been applied in Guernsey before the start of the Fiscal Year that is being considered.
Safe Harbours are defined as an exception provided in Article 8.2.1 of the GloBE Rules whose design and eligibility conditions have been approved by the Inclusive Framework and set out in
• The OECD Safe Harbours and Penalty Relief Rules
• Administrative Guidance on the GloBE Rules; and
• Any additional document published by the OECD and prescribed by regulations in Guernsey.
Therefore all the OECD Safe Harbours should be applicable for the IIR/MTT, where relevant.
As the Regulations transpose the OECD Model Rules into domestic law, all of the elections included in the OECD Model Rules are provided domestically, including:
• Excluded Entity Election
• Stock-Based Compensation Election
• Election to use the Realization Method
• Election to Spread Capital Gains
• Consolidation Election
• Unclaimed Accrual Election
• GloBE Loss Election
• Prior Year Adjustment Election
• De minimis Election
• Substance-Based Income Exclusion Election
• Taxable distribution Election
• Tax transparency Election
• Distribution Tax Regime Election
• Safe Harbour Elections
As the Regulations transpose the OECD Administrative Guidance into domestic law, all of the elections included in the OECD Administrative Guidance are provided domestically, including:
• Foreign Exchange Hedge Election
• Portfolio Shareholding Election
• Excess Negative Tax Carry-Forward Election
• Equity Investment Inclusion Election/Qualified Ownership Interest Election
• Debt Release Election
As expected, the Regulations closely follows the OECD Model Rules.
The main deviations relate to the design of the QDMTT and the exclusion of the UTPR.
Section 50 of the Regulations also provides specific rules for Protected Cell Companies. It provides that a Protected Cell Company (“PCC”) is not to be regarded as an entity and each cell of the PCC and its core are to be treated as separate entities distinct from the others.
As such, the fact that an entity is a cell of a PCC is irrelevant to determining whether the entity is a member of a Group and the accounts of the PCC are not to be regarded as Consolidated Financial Statements for GloBE purposes.
Section 61 of the Regulations states that 67 of the Income Tax (Guernsey) Law, 1975, (general provision against legal avoidance), applies for the purposes of the GloBE Regulations and the GloBE Model Rules as if references to “tax under this Law” or “tax” included references to DTT and MTT.
Part II of the Regulations applies a domestic minimum tax (DTT) from January 1, 2025, that is intended to be a QDMTT.
Section 4 of the Regulations provides that the amount of top-up tax under the QDMTT is based on the calculation of excess profits for GloBE purposes. However, there are a number of adjustments which apply either as they are not relevant or the Regulations expressly provides rules that apply these provisions.
Section 6 of the Regulations states that the following provisions of the GloBE Rules do not apply for QDMTT purposes:
• Chapter 2 (Charging Provisions);
• Articles 5.2.4 and 5.2.5 (allocation of Top-up Tax), subject to specific rules in the Regulations for the allocation of the QDMTT between entities;
• Article 5.4.2 (allocation of Additional Current Top-up Tax in accordance with Article 5.4.1);
• Article 5.4.3 (allocation of Additional Current Top-up Tax in accordance with Article 4.1.5);
• Article 5.4.4 (determination as a Low-Taxed Constituent Entity);
• Article 6.2.1(h) (application of IIR in respect of acquisition of a target Entity);
• Article 6.4.1(b) and (c) (application of IIR and UTPR in connection with Joint Ventures and JV Subsidiaries);
• Article 6.5.1(e) and (f) (application of IIR and UTPR in connection with Multi-Parented MNE Groups);
• Article 7.3 (Eligible Distribution Tax Systems);
• Article 8.1 (GloBE Information Return filing obligation);
• Article 8.3 (Administrative Guidance); and
• Article 9.4 ((Transitional relief for filing obligations) which amends Article 8.1 of the GloBE Rules for filing obligation in Transitional Year).
Taxes Pushed Down
Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Sections 8 of the Regulations.
This preserves Guernsey’s primary right to tax income accruing to a Guernsey member entity which is also a CFC. If there were no statutory derogation from the general GloBE rules for the calculation of the domestic minimum tax, and the CFC tax paid by the controlling company abroad were included in the included taxes of the Guernsey CFC, the effective tax rate would be increased. Therefore, excluding the CFC tax from the Guernsey CFCs covered taxes allows Guernsey to tax low-taxed income at a higher rate than would be the case under an IIR.
Section 8 also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (aside from Guernsey withholding tax on distributions).
International Activity Exemption
The UTPR exclusion for MNEs in their initial phase of international activity does not need to be included in a QDMTT, however, it can be included. The Second Set of OECD Administrative Guidance provides jurisdictions with three options regarding the temporary UTPR exclusion in their QDMTT legislation.
Option one allows the jurisdiction not to adopt it.
Option two allows the jurisdiction to adopt it but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction.
Option three allows the jurisdiction to adopt it without any limitations. (Note, if a jurisdiction opts for Option three, for the purposes of the QDMTT Safe Harbour the Switch-Over Rule would apply).
Guernsey applies Option two in Section 7(1)(c) of the Regulations.
Accounting Standard
Whilst the July 2024 OECD Administrative Guidance does permit local accounting standards to be used for QDMTT purposes, Guernsey simply adopts the default GloBE rules in Section 5 of the Regulations.
As such the accounting standard of the UPE is used as default however. the accounting standard used in the preparation of the financial statements of the constituent entity can be used for QDMTT purposes if:
1. it is not reasonably practicable to determine the net profit or loss for the constituent entity on the basis of the UPE accounting standard;
2. it is an acceptable or authorised accounting standard;
3. the information contained in the financial statements is reliable; and
4. permanent differences of more than EUR 1 million are conformed with the UPEs accounting standard.
Stateless Entities
Under the OECD Administrative Guidance, a domestic minimum tax does not need to apply to Stateless Constituent Entities or permanent establishments to be a QDMTT. However, jurisdictions can impose a QDMTT on these entities when they are created under the domestic Regulations of the jurisdiction (or where a permanent establishment has a place of business in the QDMTT jurisdiction).
Section 12 of the Regulations provides that the QDMTT does not apply to a Flow-through Entity that is treated as a stateless Entity in accordance with Article 10.3.2 of the GloBE Rules or a securitisation entity.
Transitional Year
Sections 14 and 15 of the Regulations provide for the transitional year refreshing rule.
A new transition year, arises in an accounting period in which the entities of an MNE/domestic fall within the scope of a qualified IIR or UTPR if this accounting period begins after the beginning of the transition year for QDMTT purposes.
In the new transition year the following attributes of the relevant Constituent Entities are refreshed:
-Any Excess Negative Tax Expense Carry-forward under Article 4.1.5 or Article 5.2.1 is eliminated at the beginning of the new Transition Year.
-The DTL recapture rule in Article 4.4.4 does not apply to any deferred tax liability that was taken into account in computing the ETR under the QDMTT and that was not recaptured prior to the new Transition Year.
-Any GloBE Loss Deferred Tax Asset that arose in a year preceding the new Transition Year must be eliminated. The Filing Constituent Entity may make a new GloBE Loss election in the new Transition Year.
-The deferred tax items previously determined are eliminated and Article 9.1.1 is applied at the beginning of the new Transition Year.
-Article 9.1.2 applies to transactions occurring after November 30, 2021 and before the beginning of the new Transition Year. However, if QDMTT was payable due to the application of Article 4.1.5 in respect of a deferred tax asset attributable to a tax loss, the deferred tax asset is not treated as arising from items excluded from the computation of GloBE Income or Loss under Chapter 3 of the OECD Model Rules.
Other
Section 13 of the Regulations provides that the GloBE Commentary on the QDMTT Safe Harbour does not apply for QDMTT purposes.
Section 11 of the Regulations applies specific rules for the allocation of the QDMTT liability between Entities. It provides that the allocation is generally based on Articles 5.2.4 and 5.2.5 of the GloBE Rules, however, in certain cases a Domestic Filing Entity may elect that the allocation of the DTT liability for the Fiscal Year be made in accordance with a special procedure.
Section 20 of the Regulations requires every Domestic Constituent Entity of a Qualifying MNE Group, Domestic Joint Venture and Domestic Joint Venture Subsidiary to register with the Tax Authority.
A Qualifying MNE Group is required to ensure that one Domestic Constituent Entity is appointed as the Domestic Filing Entity (which must be notified to the Tax Authority). The Domestic Filing Entity is responsible for registering all other Domestic Constituent Entities, Domestic Joint Ventures and Domestic Joint Venture Subsidiaries of the Group.
The deadline for registration is the later of:
• 12 months from the start of the first Fiscal Year commencing on or after 1 January 2025 of the MNE Group of which any of the following is a member:
(i) a Domestic Constituent Entity;
(ii) a Domestic Joint Venture;
(iii) a Domestic Joint Venture Subsidiary;
• 6 months from the date that such an Entity becomes a member of the MNE Group.
The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the OECD Model Rules.
The approach is that every Domestic Filing Entity located in Guernsey will have an obligation to file a GIR in Guernsey on behalf of the Domestic Constituent Entities, Domestic Joint Ventures and Domestic Joint Venture Subsidiaries. However, this obligation can be discharged if the GIR is filed in another jurisdiction with which Guernsey has a Qualifying Competent Authority Agreement in force for that period.
Where the GIR is being filed by another entity, the Domestic Filing Entity, must file a notification with the Tax Authority.
The notification must contain:
• Details of the entity that is filing the GIR, and
• The jurisdiction in which such an entity is located.
The GIR must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).
Where an MNE group does not meet the 750 million euro revenue threshold in Article 1.1 of the OECD Model Rules, Section 26 of the Regulations provides that the Domestic Filing Entity must submit a below-threshold notification to the Tax authority in respect of that Fiscal Year.
Sections 24 and 25 of the Regulations requires the submission of IIR/MTT and QDMTT/DTT tax returns by the Domestic Filing Entity of an MNE Group on behalf of all Domestic Constituent Entities, Domestic Joint Ventures and Domestic Joint Venture Subsidiaries.
The filing deadline for the GIR, tax returns and other notifications is:
(a) 15 months after the end of the Fiscal Year; or
(b) 18 months after the end of the Fiscal Year to which it relates, but
only if :
• that Fiscal Year is the first one in which the MNE Group or Domestic Joint Venture Group is liable to the DTT or MTT; and
• the MNE Group or Domestic Joint Venture Group has not been required to file a GloBE Information Return in another jurisdiction in a previous Fiscal Year
Section 52 of the Regulations provides that the DTT and MTT for each Entity are due for payment by the deadline for submitting returns.
The Regulations generally apply the penalty provisions in the Income Tax (Guernsey) Law, 1975 for GloBE purposes, subject to some specific provisions (eg Section 47 provides for a fine of up to £20,000 for failure to register).
Guernsey has opened its Pillar 2 Registration Portal, to appoint the Domestic Filing Entity and register Domestic Constituent Entities.
In October 2025, Guernsey issued the Guernsey Pillar 2 Brief: Issue 1 which includes further detail on the registration process (the actual registration system is planned to be operational during the fourth quarter of 2025).
The online system for the submission of the DTT and MTT returns (and related notifications) is being developed and it is anticipated to be available in 2026.
Note that a temporary DTT Cessation Form has been issued. The DTT Cessation Form must be submitted via post or email.
| Guernsey | |||
|---|---|---|---|
| Effective Date: | Accounting periods beginning on or after January 1, 2025 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | Yes – Transposed | |
| 1.2 | Deemed consolidation test | Yes – Transposed | |
| 1.3 | Consolidated deferred tax amounts | Yes – Transposed | |
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | Yes – Transposed | |
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | Yes – Transposed | |
| 1.6 | Meaning of ancillary for Non-Profit Organisations | Yes – Transposed | |
| 2.1 | Intra-group transactions accounted at cost | Yes – Transposed | |
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | Yes – Transposed | |
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | Yes – Transposed | |
| 2.4 | Debt release Election | Yes – Transposed | |
| 2.5 | Accrued Pension Expenses | Yes – Transposed | |
| 2.6 | Covered Taxes on deemed distributions | Yes – Transposed | |
| 2.7 | Excess Negative Tax Carry-forward guidance | Yes – Transposed | |
| 2.8 | Substitute Loss carry forwards | Yes – Transposed | |
| 2.9 | Equity Gain or loss inclusion election | Yes – Transposed | |
| 2.9 | Qualified Ownership Interest/Flow through entity | Yes – Transposed | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | Yes – Transposed | |
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | Yes – Transposed | |
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | Yes – Transposed | |
| 3.3 | Restricted Tier 1 Capital | Yes – Transposed | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | Yes – Transposed | |
| 3.5 | Simplification for Short-term Portfolio Shareholdings | Yes – Transposed | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | Yes – Transposed | |
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | Yes – Transposed | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | Yes – Transposed | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | Yes – Transposed | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | Yes – Transposed | |
| 2 | MTTCs | Yes – Transposed | |
| 3 | SBIE Rules | Yes – Transposed | |
| – Foreign rules | Yes – Transposed | ||
| Stock-based compensation election | Yes – Transposed | ||
| Leases | Yes – Transposed | ||
| – Impairment losses inc in tangible asset value | Yes – Transposed | ||
| 4.1 | QDMTT Safe Harbour | Yes – Transposed | |
| 4.2 | UTPR Safe Harbour | Yes – Transposed | |
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | Yes – Transposed | |
| 2.2.1 | Transitional CbCR – JVs | Yes – Transposed | |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | Yes – Transposed | |
| 2.3.2 | Transitional CbCR – Using different accounting standards | Yes – Transposed | |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | Yes – Transposed | |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | Yes – Transposed | |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | Yes – Transposed | |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | Yes – Transposed | |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | Yes – Transposed | |
| 3.1 | Identifying Consolidated Revenue | Yes – Transposed | |
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | Yes – Transposed | |
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | Yes – Transposed | |
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | Yes – Transposed | |
| 4.2.2 | Blended CFCs – not required to calculate an ETR | Yes – Transposed | |
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | Yes – Transposed | |
| 5.3 | 30 June 2026 Filing deadline | Yes – Transposed | |
| 6 | NMCE Simplified Calcs | Yes – Transposed | |
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | Yes – Transposed | |
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | Yes – Transposed | |
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | Yes – Transposed | |
| 1.2.1 | Exclusion of swinging accounts and separate tracking | Yes – Transposed | |
| 1.2.2 | FIFO/LIFO Basis | Yes – Transposed | |
| 1.2.3 | Aggregation of Short-term DTLs | Yes – Transposed | |
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | Yes – Transposed | |
| 1.2.2 | 5 year unclaimed accrual election | Yes – Transposed | |
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | Yes – Transposed | |
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | Yes – Transposed | |
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | Yes – Transposed | |
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | Yes – Transposed | |
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | Yes – Transposed | |
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | Yes – Transposed | |
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | Yes – Transposed | |
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | Yes – Transposed | |
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | Yes – Transposed | |
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | Yes – Transposed | |
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | Yes – Transposed | |
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | Yes – Transposed | |
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | Yes – Transposed | |
| 5.3.5 | Non-group owners: Indirect minority ownership | Yes – Transposed | |
| 5.4.2 | Taxes allocated to a flow-through entity | Yes – Transposed | |
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | Yes – Transposed | |
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | Yes – Transposed | |
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | Yes – Transposed | |
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | Yes – Transposed | |
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | Yes – Transposed | |
| 6.1.4 | Amendments to the Switch-Off rule | Yes – Transposed | |
| 6.1.4 | New definition: Securitization Entity | Yes – Transposed | |
| 6.1.4 | New definition: Securitization Arrangement | Yes – Transposed | |
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Guernsey | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Fiscal years beginning on or after January 1, 2025 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | Partially |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Separate |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | No |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Yes |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Yes |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | No |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | No |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | Yes |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | None |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes |
| GloBE Loss Election? | Not Required in QDMTT | Yes |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | Yes |
| Exclude tax allocated to Hybrids | Second AG Guidance | Yes |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | Yes |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | Yes |
| Eligible Distribution Tax Systems | Second AG Guidance | No |
| ETR Computation for Investment Entities | Second AG Guidance | Yes |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes |
| Taxable Distribution Method Election | Second AG Guidance | Yes |
| Multi-Parented MNE Groups | Second AG Guidance | Excluded – |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Yes |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes |
| SBIE Included? | Not Required in QDMTT | Yes |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes |
| De Minimis Rule Included? | Not Required in QDMTT | Yes |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Yes |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | Yes but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes |
| Deferred Tax transition: First time or refreshing rule? | Second AG | Yes – refresh |
| New transition year – amend tax attributes? | Second AG | Yes |
| Currency provisions? | Second AG | Yes |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | Yes – transposed |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | Yes – transposed |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | Yes – transposed |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | Yes |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | Yes |
| Note |
| Guernsey | ||
|---|---|---|
| Effective Date: | Fiscal years beginning on or after January 1, 2025 | |
| Section/Article | ||
| Safe Harbour & Penalty Relief Guidance | De Minimis Test | Transposed |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR Test | Transposed |
| Safe Harbour & Penalty Relief Guidance | Routine Profits Test | Transposed |
| Safe Harbour & Penalty Relief Guidance | Simplified Covered Tax defn (inc exclusion of uncertain tax positions) | Transposed |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR defn | Transposed |
| Safe Harbour & Penalty Relief Guidance | Transition Period | Transposed |
| Safe Harbour & Penalty Relief Guidance | Transition Rate | Transposed |
| Safe Harbour & Penalty Relief Guidance | Defn of Qualified Financial Statements | Transposed |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Joint Ventures | Transposed |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Tax Neutral UPEs | Transposed |
| Safe Harbour & Penalty Relief Guidance | Special Rules for Investment Entities and their Constituent Entity-owners | Transposed |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Net Unrealised Fair Value Loss | Transposed |
| Safe Harbour & Penalty Relief Guidance | Exclusions | Transposed |
| December 2023 OECD Administrative Guidance | ||
| 1 | Transitional CbCR – Purchase Accounting Adjustments(consistent reporting condition, goodwill impairment adjustment) | Transposed |
| 2.2.1 | Transitional CbCR – JVs | Transposed |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | Transposed |
| 2.3.2 | Transitional CbCR – Using different accounting standards | Transposed |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | Transposed |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | Transposed |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | Transposed |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | Transposed |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | Transposed |
| January 2025 OECD Administrtive Guidance | ||
| Amendments to CbCR Safe Harbour for 9.1 |
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