This is a new Safe Harbour included in the January 2026 OECD Side-by-Side Tax Package (see: Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package).
Side-by-Side (SbS) Safe Harbour
The SbS Safe Harbour excludes an MNE group from the IIR and UTPR (not QDMTT) where its UPE is located in a qualifying SbS jurisdiction. A qualifying SbS jurisdiction is a jurisdiction that has an eligible domestic tax regime and an eligible worldwide tax regime (generally required to be in place before January 1, 2026) as well as providing a FTC for QDMTTs.
Various conditions are required to be met for a tax system to qualify as an eligible domestic tax system or an eligible worldwide tax regime (eg for an eligible domestic system its statutory nominal CIT rate is at least 20%), however in both cases there must not be a material risk that the GloBE ETR would be below 15%.
Whether a jurisdiction qualifies as a qualifying SbS regime will be determined by the OECD and the jurisdiction will be included in the Central Record (similar to how DMTTs that qualify as QDMTTs etc are). To date only the USA is recognised by the OECD as a qualifying SbS regime.
The SbS Safe Harbour will apply for Fiscal Years from January 1, 2026.
UPE Safe Harbour
The UPE Safe Harbour is similar to the SbS Safe Harbour but only applies to exclude an MNE group from the UTPR on profits located in the UPE jurisdiction. However to qualify a jurisdiction only needs to have an eligible domestic tax regime (not an eligible worldwide tax regime as required for the SbS Safe Harbour).
As with the SbS Safe Harbour, Qualified UPE Regimes will be listed in the OECD Central Record and this Safe Harbour will apply from January 1, 2026.
Uruguay’s presidential decree dated 31 August 2026 replaces the conditional QDMTT payment waiver in Decree No. 325/025 with a compensation mechanism. Article 1 requires in-scope constituent entities allocated QDMTT in Uruguay to comply with its QDMTT obligations and pay the tax; article 7 repeals the earlier decree.
Qatar has published six decisions dealing with currency conversion, simplified reporting, the Transitional CbCR Safe Harbour, non-material constituent entities, designated local entities and registration.
The Slovak Government has approved draft legislation that would make significant changes to Slovakia’s qualified domestic minimum top-up tax regime. The proposals would implement the OECD’s new Substance-Based Tax Incentives Safe Harbour, extend the Transitional CbCR Safe Harbour and introduce rules preserving Pillar Two filing and payment obligations where a Slovak taxpayer ceases to exist without a legal successor.
Cyprus has opened a public consultation on amendments to its Pillar Two legislation intended to address observations from the European Commission and align the domestic rules more closely with OECD guidance. The consultation opened on 30 July 2026 and is scheduled to close on 5 September 2026.
On August 7, 2026, Germany published a regulation that gives domestic legal effect to a jurisdiction-by-jurisdiction list of qualifying Pillar Two jurisdictions.
On August 8, 2026, Mauritius issued its QDMTT regulations to implement its QDMTT.
On 3 August 2026, Korea’s Ministry of Finance and Economy released its 2026 Tax Reform Proposal. Among its international tax measures are proposed amendments intended to implement significant elements of the OECD/G20 Inclusive Framework’s January 2026 Pillar Two Side-by-Side Package.
Decision No. 12 of 2026 introduces a seven-month registration period, transitional deadlines and a five-year notification regime for UAE entities within the domestic minimum top-up tax framework.
Qatar’s General Tax Authority (GTA) activated its Global and Domestic Minimum Tax registration service through the Dhareeba tax platform on 2 August 2026.
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