Additional Information on the CbCR Safe Harbour in the OECD Administrative Guidance

The Transitional CbCR Safe Harbour is included in the OECD Safe Harbour and Penalty Relief Guidance and where it applies it deems the jurisdictional top-up tax to be zero.

The purpose of the safe harbour is to ease compliance difficulties that MNEs will face and, in particular, the significant systems changes required to collect the data for full GloBE calculations.

The December 2023 OECD Administrative Guidance provides additional information on the application of the CbCR Safe Harbour in a number of areas, including:

– Joint Ventures;

– Qualified Financial Statements (whether the same type of Financial Statements need to be used and whether Local Financial Statements for Statutory Reporting purposes can be used);

– Using Different Accounting Standards;

– Adjustments to Qualified Financial Statements;

– Dividend Mismatches;

– MNEs not required to file CbC Reports;

– Qualified Financial Statements for Permanent Establishments;

– Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities;

– Substance-Based Income Exclusion; and

– Treatment of Hybrid Arbitrage Arrangements.

Joint Ventures

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