OECD Issues Draft XML Schema for GloBE Information Return
On July 10, 2024, the OECD released the draft XML schema for the GloBE Information Return (GIR). This provides a method of structuring the data reporting for the GIR.
On July 10, 2024, the OECD released the draft XML schema for the GloBE Information Return (GIR). This provides a method of structuring the data reporting for the GIR.
In this article we look at some of the most significant issues to consider including the determination of when and how deals can bring groups within the scope of Pillar Two, specific considerations for private equity funds, differences in GloBE and domestic tax treatment and potential restrictions on post-acquisition transfers.
The specific treatment of dividends and other distributions under the Pillar Two GloBE Rules raises some interesting issues and opportunities in blending such payments between otherwise low-taxed entities and holding companies to reduce any potential top-up tax liability.
The Transitional CbCR Safe Harbour is a short-term measure that will allow an MNE to avoid undertaking detailed GloBE calculations for a jurisdiction if certain requirements are met. Data will need to be extracted from the CbC Report, financial statements and ERP and EPM systems. Group structure information will also be required.
Whether multinationals adopt a centralized or decentralized approach to Pillar Two will be one of the key factors in correctly establishing the systems and architecture to collect, manage, analyse and store source data for the Pillar Two effective tax rate and top-up tax calculation.
The tax data mapping assessment is the cornerstone for MNEs looking to implement an effective approach to manage Pillar Two. All systems changes flow from this.
A number of the adjustments to the deferred tax expense under Pillar 2 will mean significant changes to ERP systems. See our list of all required adjustments.
Many of the deferred tax data points are not stand-alone data sources but arise as a result of further calculations that are themselves based on underlying data-sources. There is therefore a ‘layering-up’ of data before the GloBE calculations can be effectively made.
In this article we take a comprehensive look at how the substance-based income exclusion applies including the various adjustments for permanent establishments and flow-through entities and the data points required.
The GloBE Information Return will require information on an MNEs corporate structure in so far as it impacts the application of the Pillar Two GloBE rules. In this article we look at the data points that are required to comply with this.
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