A Review of Changes in the OECDs Updated January 2025 GloBE Information Return

On January 15, 2025, the OECD issued an updated GloBE Information Return including updated Explanatory Guidance.

The updated GloBE Information Return and guidance includes provisions from the December 2023 and June 2024 OECD Administrative Guidance, as well as other aspects such as the application of the completion of the GloBE Information Return for QDMTT-only jurisdictions. 

It should be noted that this updated guidance also ties into the EU proposal to amend the Directive on administrative cooperation in the field of taxation (Directive 2011/16/EU – DAC) (DAC 9). Prior to the updated OECD GIR there were some significant differences between the EU and OECD filing.

As such, the updated OECD GIR provides that QDMTT-only jurisdictions are provided with Section 1 of the GIR (MNE Group Information) except for the High-level summary in Section 1.4. This reflects the position under DAC 9. 

It also includes an exception for filing the whole GloBE Computations section (Section 3) for UTPR Jurisdictions that have taxing rights under the UTPR but a UTPR Percentage of zero (eg the UTPR percentage could be zero as a result of Article 2.6.3 of the OECD Model Rules). The Filing Constituent Entity would file the information on the attribution of Top-up Tax under the UTPR (i.e.
the relevant row of table 3.4.3 only) instead of the whole jurisdictional section with the tax administration of relevant jurisdictions. DAC 9 also includes an exception for jurisdictions with a UTPR Percentage of zero.

Below, we cover the differences from the previous guidance on the GloBE Information Return that was published in July 2023. 

Art 1.3.1(8) – Corporate Structure

Adds in a box for ‘Art. 10.3.5 Jurisdiction (if any)’

The Filing Constituent Entity is required to report the jurisdiction that requires the UPE to apply its QIIR (Qualifying Income Inclusion Rule) under Article 10.3.5.

Note that the January 2025 guidance issued by the OECD also includes a central record of legislation with transitional qualified status for the Income Inclusion Rule (and domestic minimum taxes including the QDMTT Safe Harbour)

Art 1.3.2.1 – Constituent Entities and members of JV Groups

Art 1.3.2.1.5 – TIN

There is a clarification that for the identification of Stateless Constituent Entities, the Filing Constituent Entity will report the TIN or its functional equivalent used for purposes of Covered Taxes in the jurisdiction where the Entity was created.

Art 1.3.2.1.7 – Status for GloBE purposes 

Includes an option for a Securitisation Entity (as provided in the June 2024 OECD Administrative Guidance)

Art 1.3.2.1.11 – Parent Entity Status 

Adds in a requirement to report Parent Entity required to apply a QIIR under Art. 10.3.5 of the OECD Model Rules

Art 1.3.2.1.14 – Initial phase of International Activity

It amends the wording of point (14) to include a reference to the anti-avoidance rule in Article 9.3.5(a) of the OECD Model Rules:

Initial phase of International Activity (Article 9.3.1 or Article 9.3.5 (a)) applicable?

Arts 1.3.2.1.14 to 1.3.2.1.16 – Is the UTPR applicable in respect of the entity? 

Provides that the Filing Constituent Entity will not complete these rows in cases where no jurisdiction has taxing rights under the Under-Taxed Profits Rule (UTPR) with respect to the jurisdiction where the Constituent Entity is located or where the Transitional UTPR Safe Harbour applies with respect to that jurisdiction.

Art 1.3.2.1.16 – UPEs Ownership Interests & Parent Entities required to apply a QIIR

Amended wording to confirm that the Filing Constituent Entity will report whether the UPE’s Ownership Interests in the Constituent Entity (CE) are held directly or indirectly by Parent Entities required to apply a QIIR in that CE (or whether the aggregate Allocable Shares of Top-up Taxes of Parent Entities required to apply a QIIR for the member of Joint Venture (JV)| Group reduces to zero the JV Group Top-up Tax).

Art 1.3.3.4 – Changes in the corporate structure (status before change)

Adds in options for:

-Securitisation Entity

-Parent Entity required to apply a QIIR under Art. 10.3.5

Art 1.3.3.5 – Changes in the corporate structure (status after change)

Adds in options for:

-Securitisation Entity

-Parent Entity required to apply a QIIR under Art. 10.3.5

Arts 1.3.3.5 to 1.3.3.8 – Changes in the corporate structure (ownership interests)

It provides additional clarification where a Constituent Entity (or other Entity of the MNE Group) or member of a JV Group is wound up during the Reporting Fiscal Year. In this case, the Filing Constituent Entity will report the relevant status for GloBE purposes on the day of the change before the transaction in 1.3.3.4 and “Non-group Member” in 1.3.3.5.

The Filing Constituent Entity will then identify the Entities holding Ownership Interests in the Constituent Entity (or other Entity of the MNE Group) or member of a JV Group on the day of the change before the transaction in 1.3.3.6 and report the Ownership Interests held in the Constituent Entity (or other Entity of the MNE Group) or member of a JV Group by any of such Entities in 1.3.3.7. The Filing Constituent Entity, will not complete 1.3.3.8.

Art 1.4 – High-level summary of GloBE Information: General

It clarifies that the Filing Constituent Entity will not complete columns 1.4.2 to 1.4.9 in cases where no jurisdiction has taxing rights for the jurisdiction.

Art 1.4.6 – High-level summary of GloBE Information: ETR

It clarifies that the Filing Constituent Entity will not complete this if the MNE Group (or the relevant subgroup) has a GloBE Loss in the jurisdiction.

Art 2 – Jurisdictional safe harbours and exclusions: General

It clarifies that in general, the Filing Constituent Entity will file the Jurisdictional Safe Harbours and Exclusions section for a jurisdiction where a QDMTT is imposed on Constituent Entities or in respect of Joint Ventures or members of JV Group of the MNE Group with the tax administration of that jurisdiction.

Art 2.1 – Jurisdictional safe harbours and exclusions: Characteristics of the jurisdiction

The updated guidance adds in a new (4) to require the disclosure of  ‘a Jurisdiction with taxing rights’.

This is required as a QDMTT Safe Harbour jurisdiction or a jurisdiction with an IIR that applies to domestic Entities will have taxing rights in respect of itself. In addition, multiple jurisdictions may have taxing rights in respect of the same other jurisdiction (eg a UPE and POPE). In this case, both the UPE jurisdiction and the POPE jurisdiction need to be reported.

The updated guidance adds in a new (5) to require the disclose of the ‘Existence of reportable differences (Yes/No)’.

The Filing Constituent Entity selects ‘Yes’ for a jurisdiction when either the MNE Group has reported that it is eligible for a safe harbour or exclusion in Section 2 when it is not eligible for the same safe harbour or exclusion under the domestic law of the relevant jurisdiction with taxing rights or, the MNE Group has reported that it is not eligible for a safe harbour or exclusion in Section 2 when it is eligible for the same safe harbour or exclusion under the domestic law of the relevant jurisdiction with taxing rights.

Art 2.2.1.1.1 – Jurisdictional exceptions: Safe harbour election

It clarifies that option (d) (QDMTT safe harbour) will not be selected when the switch-off rule applies to the QDMTT Safe Harbour in respect of the jurisdiction or the relevant subgroup.

Art 2.1.2 – Jurisdictional exceptions: Permanent safe harbours

Splits out the CEs qualifying for safe harbours to:

– Transitional CbCR Safe Harbour-Constituent Entities

– Transitional CbCR Safe Harbour- Joint Venture Group (specify which JV Group)

– Transitional UTPR Safe Harbour.

Art 2.2.2 – Jurisdictional exceptions: De Minimis Exclusion

It adds in a new disclosure for ‘Simplified Calculations for Non-material Constituent Entities – Constituent Entities that are not NMCEs’.

The Filing Constituent Entity selects this if the Simplified Calculation for Non-material Constituent Entities is utilised but it only applies to a portion of the Constituent Entities in the subgroup.

Art 3 – GloBE Computations

General information is provided that provides for an exception applies for UTPR Jurisdictions that have taxing rights under the UTPR but a UTPR Percentage of zero. The Filing Constituent Entity will then provide information on the attribution of Top-up Tax under the UTPR instead of the whole jurisdictional section with the tax administration of these jurisdictions.

Art 3.1 – GloBE Computations: Characteristics of the jurisdiction

It adds in a number of new disclosures including:

4. Jurisdictions with taxing rights

5. ETR

6. Adjusted Covered Taxes

7. Net GloBE Income or Loss

8. Substance-based Income Exclusion

9. Additional Current Top-up Tax

10. Top-up Tax amount under domestic legislation

11. Elections

12. Aggregate current tax expense with respect to Covered Taxes after allocations in Article 4.3

13. Qualified Refundable Tax Credits or Marketable Transferable Tax Credits (tax expense)

14. Other tax credits (tax expense)

15. Deferred tax expense amount

16. Qualified Refundable Tax Credits or Marketable Transferable Tax Credits (income)

17. Excess Negative Tax Expense Carry Forward

18. Transition Rules

Note that Sections 3.1.5 to 3.1.10 do not need to be reported if only a single jurisdiction is reported as having taxing rights in 3.1.4 or if the QDMTT Safe Harbour applies with respect to the jurisdiction or subgroup.

Art 3.2.1.1 (and 3.2.4.1) – GloBE Computations: ETR

The updated GIR adds in a reference to Restricted Tier 1 capital (as provided in the February 2023 OECD Administrative Guidance:

Increase/decrease to equity attributed to Additional Tier One and Restricted Tier One Capital distributions paid/payable or received/receivable – Article 3.2.10

Art 3.2.2.1 – Jurisdictional computations relating to deferred tax accounting: Deferred Tax adjustments

The updated GIR adds in additional disclosures to reflect the June 2024 OECD Administrative Guidance in relation to differences between the GloBE and accounting carrying value of assets:

b. Deferred tax expense in relation to assets or liabilities for which the GloBE carrying value is different to the accounting carrying value

c. Deferred tax expense based on the GloBE carrying value of assets or liabilities
Art 3.2.2.2

This is amended and reworked to provide to refer to the fifth preceding year as opposed to require the annual tracking.

It also requires additional information for Aggregate DTL recapture accounts (to reflect the June 2024 OECD Administrative Guidance):

1. Reporting Fiscal Year 2. Prior Fiscal Year

a. Amount of pre-Transition Year DTLs

b. Amount of Outstanding Balance

c. Amount of Unjustified Balance

Art 3.2.3.1 Jurisdictional elections

This includes an addition to reflect the election not to allocate cross-border deferred tax to reflect the June 2024 OECD Administrative Guidance (a new (i) Election not to allocate cross-border deferred tax)

Note that generally for 5 year elections the Filing Constituent Entity will report the revocation year in the GloBE Information Return filed for the revocation year and in the GloBE Information Returns filed for the four Fiscal Years succeeding the revocation year.

Art 3.2.4 – Constituent Entity Computations: Aggregated reporting for consolidated groups

It further confirms that this will be completed on a CE-by-CE basis for entities that are subject to separate ETR computations under the GloBE Model Rules (e.g., Investment Entities and Insurance Investment Entities), irrespective of whether those Entities are included in a tax consolidated group.

Art 3.2.4.2.b – Adjusted Covered Taxes: cross – allocation of covered taxes

When the GIR is filed for QDMTT purposes, the Filing Constituent Entity does not report the Covered Tax expense of various taxes allocated from the CE owner to the CE for GloBE purposes. This includes:

(i) a Constituent Entity-owner under a CFC Tax Regime that is allocable to a domestic Constituent Entity under Article 4.3.2(c) of the GloBE Rules;

(ii) a Main Entity that is allocable under Article 4.3.2(a) of the GloBE Rules to a Permanent Establishment located in the jurisdiction;

(iii) a Constituent Entity-owner on income of a Hybrid Entity or a Reverse Hybrid Entity that is allocable under Article 4.3.2(d) to a Hybrid Entity or Reverse Hybrid Entity that is either located in the jurisdiction or is included in the scope of the QDMTT because the QDMTT applies to stateless Flow-through Entities created in the QDMTT jurisdiction; and

(iv) a Constituent Entity owner (e.g. net basis taxes), other than a withholding tax imposed by the QDMTT jurisdiction, that is allocable to a distributing Constituent Entity located in the jurisdiction under Article 4.3.2 (e) of the GloBE Rules.

This reflects the July 2023 OECD Administrative Guidance that provides that in order for a domestic minimum tax to be a QDMTT, these pushdowns are not included in the QDMTT calculation.

However, the Filing Constituent reports those amounts included in the financial accounts of a Constituent Entity-owner or Main Entity located in the QDMTT jurisdiction and for which an adjustment has to be made.

Note 3.2.4.2.b.3 clarifies that the Filing Constituent Entity will identify separately the allocation results from the application of a Blended CFC regime by reporting “4.3.2(c) – Blended CFC regime”

Art 3.2.4.2 (c) – Adjusted Covered Taxes: Deferred tax expense amount for GloBE purposes

The updated GIR requires additional information for:

4. Difference between deferred tax expense recorded at a lower tax rate than the Minimum Rate and recast at Minimum Rate

5. Difference between the deferred tax expense recorded at a higher tax rate than the Minimum Rate and recast at Minimum Rate

Art 3.2.4.3 – Constituent Entity Elections

It includes updates to require disclosure of the

a. Election to apply the Simplified Calculations for NMCEs (Simplified Calculations Safe Harbour)

i. Unclaimed Accrual Five-Year election (Article 4.4.7) (Under the June 2024 OECD Administrative Guidance the Filing Constituent Entity can make an Unclaimed Accrual Five-Year Election for a deferred tax liability for a general ledger account or an Aggregated DTL Category irrespective of the reversal time period).

j. GloBE Loss Election (Article 4.5.6)

Art 3.3.4 – QDMTT

An amended paragraph (6) requires disclosure of whether the local currency election in the December 2023 OECD Administrative Guidance has been made (it adds in a new 6. Five-year election to use the CFS presentation currency or the local currency.)

(The OECD Administrative Guidance permits a Five-year election to use the UPE presentation currency or the local currency when the QDMTT legislation requires QDMTT computations to be made using the local accounting standard and one or more Constituent Entities in the jurisdiction use a currency other than the local currency as their functional currency)

General Information on the Use of the GIR for QDMTT purposes

The updated GIR guidance provides that jurisdictions that have implemented a QDMTT would use equivalent datapoints to those provided in the GloBE Information Return.

However, where a single jurisdiction has taxing rights under the GloBE Rules or where a QDMTT Safe Harbour applies with respect to a jurisdiction or subgroup reported in Section 1.4.2 or Section 3 of the GIR, those sections of the GIR should be completed based on the domestic legislation of the jurisdiction with those taxing rights.