Countries With Pillar 2 Provisions for Securitisation Entities

General

(i) application of the jurisdiction’s QDMTT to securitisation vehicles without any specific adjustment of the rules;

(ii) exclusion of securitisation vehicles from the scope of the QDMTT; or

(iii) inclusion of securitisation vehicles in the scope of the QDMTT while providing that the amount of QDMTT that has been determined for a securitisation vehicle is imposed on another Constituent Entity located in the same jurisdiction and forming part of the same MNE Group.

As such, jurisdictions implementing QDMTTs may exclude a Securitisation Entity from its scope (such that the Securitisation Entity is not treated as a Constituent Entity for the purposes of that QDMTT).

Where it does apply a QDMTT to securitization entities, the QDMTT is not required to impose top-up tax liabilities on SPVs used in securitisation transactions and any QDMTT liability in respect of a Securitisation Entity should generally be imposed on other Constituent Entities located in the jurisdiction.

For the purposes of the QDMTT safe harbour, the Switch-off rule will be amended so that QDMTTs that impose the top-up tax liability computed for a Securitisation Entity on other Constituent Entities located in the jurisdiction or that exclude Securitisation Entities from the scope of the tax would both still meet the Consistency Standard.

For the purposes of the Under-Tax Profits Rule (UTPR), under the existing guidance jurisdictions may exclude Securitisation Entities from liability to top-up taxes under the UTPR.

In the unlikely scenario where the UTPR jurisdiction would be allocated UTPR Top-up Tax in a year when a Securitisation Entity is the only Constituent Entity located in the jurisdiction, this jurisdiction would be excluded from the UTPR allocation mechanism in subsequent Fiscal Years if the top-up tax remains uncollected.

As a Securitisation Entity would not be expected to be a Parent Entity within a MNE Group, it would not in practice be liable to a top-up tax charge under the Income Inclusion Rule.

In the table below we highlight the laws that have been enacted to date that include Securitisation Entity provisions for QDMTTs (eg this excludes, for instance, Jersey, which although it has enacted a domestic minimum tax (which includes provisions for securitisation Entities), this is not a QDMTT).