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Contents

On January 15, 2025, the OECD issued Administrative Guidance that includes a list of jurisdictions that have transitional qualified status for the purposes of the income inclusion rule (IIR) and domestic minimum tax (DMTT), including the QDMTT Safe Harbour. 

The list of jurisdictions with transitional qualifying status applies as at January 15, 2025, however, it does not yet include a number of jurisdictions that have IIRs and DMTTs in place. 

Jurisdictions that Qualify (and Don’t Qualify) Currently for Transitional Qualified Status

The table below indicates:

-which jurisdictions have an IIR or DMTT;

-the effective date of implementation;

-whether the IIR and DMTT qualify for Transitional Qualified Status;

-if there is a QDMTT, whether that qualifies for the QDMTT Safe Harbour (again under the Transitional Qualified Status rules).

CountryStatusIIR: EffectiveQIIRDMTT: EffectiveQDMTTQDMTT Safe HarbourGloBE Country Guide 
(Transitional Qualified Status)(Transitional Qualified Status)(Transitional Qualified Status)
Australia

January 1, 2024YesJanuary 1, 2024YesYesAustralia: GloBE Country Guide
AustriaEnacted Law
December 31, 2023YesDecember 31, 2023YesYesAustria: GloBE Country Guide
BahamasDraft Legislation
NoNoJanuary 1, 2025 (unless the Group or any of its Constituent Entities is subject to an IIR or UTPR in another jurisdiction in respect of that Fiscal Year)NoNoThe Bahamas: GloBE Country Guide
BahrainEnacted Law
NoNoJanuary 1, 2025NoNoBahrain: GloBE Country Guide
BarbadosEnacted Law
NoNoJanuary 1, 2024YesYesBarbados: GloBE Country Guide
BelgiumEnacted Law
December 31, 2023YesDecember 31, 2023YesYes Belgium: GloBE Country Guide
BrazilEnacted Law
NoNoJanuary 1, 2025NoNoBrazil: GloBE Country Guide
BulgariaEnacted Law
January 1, 2024YesJanuary 1, 2024YesYesBulgaria: GloBE Country Guide
CanadaEnacted Law
December 31, 2023YesDecember 31, 2023YesYesCanada: GloBE Country Guide
CroatiaEnacted LawDecember 31, 2023YesDecember 31, 2023YesYesCroatia: GloBE Country Guide
CuracaoDraft LegislationJanuary 1, 2025NoJanuary 1, 2025NoNoCuracao: GloBE Country Guide
CyprusEnacted Law
December 31, 2023NoDecember 31, 2024NoNoCyprus: GloBE Country Guide
Czech RepublicEnacted Law
December 31, 2023YesDecember 31, 2023YesYesCzech Republic: GloBE Country Guide
DenmarkEnacted Law
December 31, 2023YesDecember 31, 2023YesYesDenmark: GloBE Country Guide
EstoniaEnacted Law
Art. 50 Postponement to December 31, 2029NoNoNoNoEstonia: GloBE Country Guide
FinlandEnacted Law
December 31, 2023YesDecember 31, 2023YesYesFinland: GloBE Country Guide
FranceEnacted Law
December 31, 2023YesDecember 31, 2023YesYesFrance: GloBE Country Guide
GermanyEnacted Law
December 31, 2023YesDecember 31, 2023YesYesGermany: GloBE Country Guide
GibraltarEnacted Law
December 31, 2024NoDecember 31, 2023NoNoGibraltar: GloBE Country Guide
GreeceEnacted Law
December 31, 2023YesDecember 31, 2023YesYesGreece: GloBE Country Guide
GuernseyEnactedJanuary 1, 2025 NoJanuary 1, 2025 NoNoGuernsey: GloBE Country Guide
Hong KongDraft LawJanuary 1, 2025 NoJanuary 1, 2025 NoNoHong Kong: GloBE Country Guide
HungaryEnacted Law

December 31, 2023YesDecember 31, 2023YesYesHungary: GloBE Country Guide
IndonesiaEnacted Law

January 1, 2025NoJanuary 1, 2025NoNo
IrelandEnacted Law

December 31, 2023YesDecember 31, 2023YesYesIreland: GloBE Country Guide
Isle of ManEnacted Law

January 1, 2025NoJanuary 1, 2025 NoNoIsle of Man: GloBE Country Guide
ItalyEnacted Law

December 31, 2023YesDecember 31, 2023YesYesItaly: GloBE Country Guide
JapanEnacted Law

April 1, 2024YesApril 1, 2026NoNoJapan: GloBE Country Guide
JerseyEnacted Law

January 1, 2025 NoNoNoNoJersey: GloBE Country Guide
KenyaEnacted Law

NoNoJanuary 1, 2025NoNo
KuwaitEnacted Law (Awaiting Regulations)

NoNoJanuary 1, 2025NoNoKuwait: GloBE Country Guide
LatviaEnacted Law

Art. 50 Postponement to December 31, 2029NoNoNoNoLatvia: GloBE Country Guide
LiechtensteinEnacted Law

January 1, 2024YesJanuary 1, 2024YesYesLiechtenstein: GloBE Country Guide
LithuaniaEnacted Law

Art. 50 Postponement to December 31, 2029 (draft law to apply an IIR from January 1, 2025)NoNo (draft law to apply a QDMTT from January 1, 2025)NoNoLithuania: GloBE Country Guide
LuxembourgEnacted Law

December 31, 2023YesDecember 31, 2023YesYesLuxembourg: GloBE Country Guide
MalaysiaEnacted Law

January 1, 2025NoJanuary 1, 2025NoNoMalaysia: GloBE Country Guide
MaltaEnacted Law

Art. 50 Postponement to December 31, 2029NoNoNoNoMalta: GloBE Country Guide
MauritiusPartial EnactmentNoNoIncluded in Finance Act – Awaiting DetailsNoNo
New ZealandEnacted Law

January 1, 2025NoNo (But a domestic IIR from January 1, 2026)NoNoNew Zealand: GloBE Country Guide
North MacedoniaEnacted Law

January 1, 2024NoJanuary 1, 2024NoNoNorth Macedonia: GloBE Country Guide
NorwayEnacted Law

January 1, 2024YesJanuary 1, 2024YesYesNorway: GloBE Country Guide
OmanEnacted Law (Awaiting Regulations)

Awaiting DetailsNoAwaiting DetailsNoNo–
PolandEnacted Law

January 1, 2025 (option to apply from January 1, 2024)NoJanuary 1, 2025 (option to apply from January 1, 2024)NoNoPoland: GloBE Country Guide
PortugalEnacted Law

December 31, 2023NoDecember 31, 2023NoNoPortugal: GloBE Country Guide
QatarDraft LawAwaiting DetailsNoAwaiting DetailsNoNo–
RomaniaEnacted Law

December 31, 2023YesDecember 31, 2023YesYesRomania: GloBE Country Guide
SingaporeEnacted Law

January 1, 2025NoJanuary 1, 2025NoNoSingapore: GloBE Country
SlovakiaEnacted Law

Art. 50 Postponement to December 31, 2029NoDecember 31, 2023YesYesSlovakia: GloBE Country Guide
SloveniaEnacted Law

December 31, 2023YesDecember 31, 2023YesYes Slovenia: GloBE Country Guide
South AfricaEnacted Law

January 1, 2024NoJanuary 1, 2024NoNoSouth Africa: GloBE Country Guide
South KoreaEnacted Law

January 1, 2024YesNoNoNoSouth Korea: GloBE Country Guide
SpainEnacted Law

December 31, 2023NoDecember 31, 2023NoNoSpain: GloBE Country Guide
SwedenEnacted Law

December 31, 2023YesDecember 31, 2023YesYesSweden: GloBE Country Guide
SwitzerlandEnacted Law

January 1, 2025NoJanuary 1, 2024YesYesSwitzerland: GloBE Country Guide
ThailandEnacted Law (Awaiting Regulations)

January 1, 2025NoJanuary 1, 2025NoNoThailand: GloBE Country Guide
The NetherlandsEnacted Law

December 31, 2023YesDecember 31, 2023YesYesNetherlands: GloBE Country Guide
Turkey Enacted Law

January 1, 2024YesJanuary 1, 2024YesYesTurkey: GloBE Country Guide
UAEAnnouncement, Consultation + High Level Amendments to CIT LawNoNoJanuary 1, 2025NoNo–
United KingdomEnacted Law

31-Dec-23YesDecember 31, 2023YesYesUnited Kingdom: GloBE Country Guide
VietnamEnacted Law

January 1, 2024YesJanuary 1, 2024YesYesVietnam: GloBE Country Guide

There are therefore a number of jurisdictions with enacted legislation (particularly where this was enacted late in 2024) that do not yet have transitional qualified status.

It should be noted that even if a a jurisdiction is included in the OECD list of qualifying jurisdictions, this does not necessarily mean that the provisions will be directly applicable in domestic jurisdictions. Whilst the implementation of the QDMTT Safe Harbour, for instance, in domestic law frequently defers qualification of foreign DMTTs/QDMTTs to the jurisdictions agreed at international level by the OECD, this is not always the case.

In Australia, for example, Section 8-200 of the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024, provides that for the purposes of the QDMTT Safe Harbour the Minister will issue a legislative notice to determine jurisdictions that have QDMTT Safe Harbour status. Therefore, the list published by the OECD under its Transitional Qualification Mechanism will not have direct effect in Australia.

Why Is Qualifying Status Important?

The application of the GloBE rules is dependent on jurisdictions implementing Qualifying Income Inclusion Rules (QIIRs), Qualifying Domestic Minimum Taxes (QDMTTs) and Qualifying Under-taxed Payments Rules (QUTPRs). If jurisdictions implement rules that aren’t classed as ‘qualifying’ this would impact on how the GloBE rules apply to the MNE group.

For instance, if an MNE had a low-taxed constituent entity (CE) in a jurisdiction that implemented a QDMTT, the CE would be subject to the QDMTT in that jurisdiction. The tax levied on the QDMTT would be available as a credit (assuming the QDMTT safe harbour did not apply) against any top-up tax levied under an IIR in a foreign parent jurisdiction.

However, if the domestic minimum tax that was levied was not ‘qualifying’ the GloBE rules would apply top-up tax under the IIR to the foreign parent (generally, unless the UTPR applied) . The tax levied under the domestic minimum tax would just be another covered tax for the purpose of calculating the ETR of the constituent entity.

Therefore, determining which IIRs, UTPRs and DMTs are qualifying is essential.

One option would be for each jurisdiction to unilaterally assess the GloBE legislation of each jurisdiction and determine whether it would be qualified or not. The risk of this is a lack of consistent treatment amongst jurisdictions which would significantly hinder the application of the GloBE rules.
 
As such, the OECD has developed a peer review process that would provide a common assessment of the qualified rule status of the IIR, UTPR and DMTT (as well as the eligibility for the QDMTT Safe Harbour), in each implementing jurisdiction. The purpose of this process is to achieve consistency and co-ordination in the application of the GloBE Rules across different jurisdictions.
 
The peer review process consists of a full legislative review and ongoing monitoring by the Inclusive Framework. The full legislative review assesses whether the legislation of an implementing jurisdiction achieves consistent outcomes with the GloBE Rules. The ongoing monitoring ensures that rules are in practice applied and administered consistently with the GloBE Rules.
 
However, the full legislative review process will take time to complete. As a number of jurisdictions are implementing an IIR and DMTT from 2024, there needs to be a method to determine whether a jurisdictions GloBE rules are qualifying or not.
 
The OECD has outlined a transitional qualification mechanism to allow for the effective application of the rules.
Transitional Qualification Mechanism
The Transitional Qualification Mechanism is a temporary method of determining a jurisdictions qualified status before the full legislative review is completed. 
 
It is based on a self-certification by an implementing jurisdiction that its legislation achieves consistent outcomes with the key provisions of the GloBE Rules. Where the rules of an implementing jurisdiction contain some minor inconsistencies, that jurisdiction can still make a self certification where the inconsistencies are expected to be addressed within an agreed timeframe.
 
Implementing jurisdictions begin the transitional qualification mechanism by preparing information on the main features of their legislation which they provide to the OECD Secretariat to explain the basis for the self-certification.
 
An implementing jurisdiction can self-certify either based on its final or draft legislation. In the latter case, the draft should be close to final (i.e. ready to be introduced to the domestic legislative body) or publicly available. The transitional qualified status is determined on the basis of the draft legislation, and it is expected to continue to apply after the legislation is enacted.
 
This information is then shared with all members of the IF. The transitional qualification mechanism allows any IF member (including non-implementing jurisdictions) to raise questions on the self-certification based on this high-level information and to ask for these questions to be considered by all IF members in a meeting. If no questions are received or if questions from IF members are resolved, the implementing jurisdiction’s legislation is recorded as having transitional qualified status.
 
If questions from IF members are not resolved and the Working Party agrees (on a consensus-minus-one basis) that an implementing jurisdiction’s legislation should not be determined as qualified under the transitional qualified mechanism, the transitional qualified status is not recorded.
 
If no agreement can be reached, then a jurisdiction’s self-certification will be respected but the implementing jurisdiction can be expected to be subject to an accelerated full legislative review to consider those questions raised that were not resolved to delegates’ satisfaction.
Timeline
Once an implementing jurisdiction submits its self-certification, the transitional qualified status is expected to be established within 12 months after the effective date of the legislation. Once confirmed, the qualified status is expected to apply from the effective date of that legislation.
 
The full legislative review is expected to start no later than two years after the effective date of the legislation and the transitional qualified status of an implementing jurisdiction’s legislation will end once the full legislative review is completed.
 
If the transitional qualified status is lost, for instance if the full legislative review concludes that the legislation is not qualified, the loss of the transitional qualified status will not be retrospective.
 
The OECD website will has therefore provided its first confirmation of qualified status under the transitional qualification mechanism. The list of implementing jurisdictions’ domestic legislation that are qualified on a transitional basis include the start date of the transitional qualified status (i.e., the effective date of the legislation) and will also be updated in future to indicate the date when it was lost, if relevant. Implementing jurisdictions are required to recognise the transitional qualified status of other implementing jurisdictions’ legislation and will rely on the outcomes of the process for the application of the rule order.
 
The process for confirming an implementing jurisdiction’s self-certification of qualified status under the transitional mechanism is prioritised based on the effective date of the legislation.

For detailed information on the application of the GloBE Rules in  based on the latest law, see our:

GloBE Country Guides

OECD Administrative Guidance: Domestic Implementation Matrix

QDMTT: Domestic Design Matrix

Transitional CbCR Safe Harbour: Domestic Implementation Matrix

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Lee Hadnum

Lee is a qualified Chartered Accountant and Chartered Tax Adviser. A former Senior Tax Analyst at Bloomberg Tax, Lee began his career in Ernst & Young's Entrepreneurial Services department and has 20 years of international tax planning experience. Lee's books have been recommended by The Times, The Guardian and The Telegraph.

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