Impact of the Staggered Implementation of the GloBE Rules

The global implementation of the GloBE rules is staggered with different jurisdictions applying both the Income Inclusion Rule (IIR) and the Under-Taxed Payments Rule (UTPR) from different dates.

Yesterdays Singaporean Budget stated that they will apply an IIR from January 1, 2025. Most other jurisdictions plan to apply an IIR from 2024. Both the draft EU Directive and the enacted South Korean GloBE law apply a January 1, 2024 start date.

In addition to this most of the draft law issued to date either doesn’t include the UTPR or delays its application. The EU Directive for instance requires the UTPR to apply for fiscal years beginning from 31 December 2024.

However, the South Korean GloBE law applies the UTPR (which is called the ‘supplementary income inclusion rule’ in the law) from January 1, 2024.

There are therefore significant difference in the application, not only of the IIR, but also the UTPR.