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Designing a Qualified Domestic Minimum Top-Up Tax (QDMTT)

In order to be a qualified domestic minimum top-up tax (QDMTT), a domestic minimum tax is generally required to follow the GloBE rules so that the calculation of the ETR and top-up tax is substantially the same. An MNE should be able to use the same data points for calculating its minimum tax liability that it uses for calculating its GloBE tax liability.
One option would be to just apply all of the GloBE rules with changes for the income inclusion rule (IIR) and under-taxed payments rule (UTPR) (as the IIR and UTPR mainly apply to the income of foreign constituent entities, whereas a QDMTT applies to domestic constituent entities).
However, it is beneficial to adapt the design of the QDMTT to reflect the domestic tax regime as otherwise this could exacerbate the complexity of a QDMTT and include provisions that aren’t even relevant to the jurisdiction (eg the stock-based compensation election, that would not be relevant if the jurisdiction did not allow companies to deduct the value of stock-based compensation based on the market value of the stock.)
The OECD Administrative Guidance provides details on which aspects of the GloBE Rules need to be reflected in the QDMTT regime and which aspects don’t. 

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