Key Aspects of the GloBE Information Return Guidance

On July 17, 2023, the OECD issued the standardised GloBE Information Return (GIR) that must be submitted by MNE groups within the scope of the GloBE rules.  This follows the consultation document on the GIR which ran until February 3, 2023. 

There is a balance between requiring too much upfront information, which would represent a substantial compliance burden for MNEs and would increase administrative and compliance costs, and not requiring sufficient information to accurately support the top-up tax calculation (which could also increase MNEs compliance costs if tax authorities then needed to request the information).

Whilst the revised GIR does still include a huge number of data points, it allows MNE groups to opt for a transitional simplified jurisdictional reporting framework until June 30, 2030. This replaces entity level reporting of GloBE calculations with jurisdictional reporting to allow MNEs sufficient time to implement correct accounting and reporting systems. This would, however, only apply for the GIR filing and would not impact on top-up tax calculations.

Another key aspect of the GIR guidance relates to the information to be shared with the tax authorities of other jurisdictions.

Whilst there is a default requirement for each constituent entity to file a GloBE information return, under Article 8.1.2 of the Model GloBE Rules, this does not apply when the UPE or a designated filing entity files the GloBE information return with the tax authority of the jurisdiction where it is located if there is a Qualifying Competent Authority Agreement in place to exchange GloBE information with the jurisdiction of the constituent entity.

Given that all jurisdictions will not require all of the information from the GIR, the guidance establishes a broad framework for the level of information exchange depending on the application of the GloBE rules for a jurisdiction. UPE jurisdictions are the only jurisdictions to receive full information from the GIR (unless an MNE elects for other entities to also receive full information).

The requirement to prepare and submit a GIR is separate from the requirement to register, declare and pay top-up tax.

The Model GloBE Rules and the EU Minimum Tax Directive do not provide any requirement for taxpayers to register as being in scope of the GloBE Rules or to de-register when they fall out of scope.

However, many jurisdictions will require GloBE registration for administrative purposes.

The approach from the legislation issued to date has been inconsistent, with some including relatively detailed registration provisions and others being silent on the issue. See: GloBE Implementation: Domestic Registration Requirements

Similarly most of the detailed Pillar Two legislation we have seen issued to date include provisions governing payment deadlines and tax return filing requirements with deadlines varying depending on the jurisdiction.