OECD Administrative Guidance: Domestic Implementation Matrix

A key aspect of Pillar Two is that the GloBE Rules are implemented uniformly by domestic jurisdictions. 

From the legislation (both draft and enacted) released to date, whereas there are few and relatively minor differences from the OECD Model Rules, there are significant differences in the extent to which the OECD Administrative Guidance is reflected.

This is to be expected. Jurisdictions have had nearly two years to implement the OECD Model Rules, but the lead time from the Administrative Guidance is much shorter.  

On February 2, 2023, the OECD issued the First Set of Agreed Administrative Guidance for the Pillar Two GloBE Rules, with a Second Set issued on July 17, 2023. An additional tranche of Administrative Guidance is also being developed.
The amendments and additions in the Administrative Guidance include significant changes. As a summary, the first two sets cover:
First Set of OECD Administrative Guidance 
1.1Rebasing monetary thresholds in the GloBE Rules
1.2Deemed consolidation test
1.3Consolidated deferred tax amounts
1.4Sovereign wealth funds and the definition of Ultimate Parent Entity
1.5Clarifying the definition of ‘Excluded Entity’
1.6Meaning of “ancillary” for Non-Profit Organisations
2.1Intra-group transactions accounted at cost
2.2Excluded Equity Gains or Loss and hedges of investments in foreign operations
2.3Excluded Dividends – Asymmetric treatment of dividends and distributions
2.4Debt release Election
2.5Accrued Pension Expenses
2.6Covered Taxes on deemed distributions
2.7Excess Negative Tax Carry-forward guidance
2.8Substitute Loss carry forwards
2.9Equity Gain or loss inclusion election
2.10Allocation of taxes arising under a Blended CFC Tax Regimes
3..1Application of Taxable Distribution Method Election to Insurance Investment Entities
3.2Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity
3.3Restricted Tier One Capital
3.4Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders
3.5Simplification for Short-term Portfolio Shareholdings
3.6Application of Tax transparency election to mutual insurance companies
4.1Deferred tax assets and tax credits under Transitional Rules
4.2Applicability of Transitional Rules to transactions similar to asset transfers
4.3Asset carrying value and deferred taxes under Transitional Rules
Second Set of OECD Administrative Guidance
1Currency Conversion Rules
2Tax Credits Guidance (MTTCs)
3SBIE Rules
– Foreign rules
– Stock-based compensation election
– Lease
– Impairment losses inc in tangible asset value
4.1QDMTT Safe Harbour
4.2UTPR Safe Harbour
Keeping track of the extent to which domestic GloBE laws implement these provisions is crucial.
We have tracked the draft and enacted domestic laws issued to date back to both sets of OECD Administrative Guidance in this matrix for our members. This will be constantly updated as new or amended legislation is issued.
Administrative Guidance Matrix

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