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 a number of 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 , a Third Set on December 18, 2023 and a Fourth Set on June 17, 2024.
The amendments and additions in the Administrative Guidance include significant changes. As a summary, the first four 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
Third Set of OECD Administrative Guidance
1Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment)
2.2.1Transitional CbCR – JVs
2.3.1Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting
2.3.2Transitional CbCR – Using different accounting standards
2.3.3Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Misatches
2.3.4Transitional CbCR – MNEs not required to file CbC Reports
2.3.5Transitional CbCR – Qualified Financial Statements for PEs
2.4.2Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities
2.6Transitional CbCR – Treatment of hybrid arbitrage arrangements
3.1Identifying Consolidated Revenue
3.2Mismatch between Fiscal Years of the UPE and another Constituent Entity
3.3Mismatch between Fiscal Year and Tax Year of Constituent Entity
4.2.1Blended CFCs – multiple GloBE Jurisdictional ETRs 
4.2.2Blended CFCs – not required to calculate an ETR
4.2.3Blended CFCs – income of non-GloBE Entities
5.330 June 2026 filing deadline
6NMCE Simplified Calculations
Fourth Set of OECD Administrative Guidance
1.2.1Aggregate DTL Category basis
1.2.1Exclusion of certain types of GL accounts and separate tracking
1.2.1Exclusion of GL accounts that generate standalone DTAs
1.2.1Exclusion of swinging accounts and separate tracking
1.2.2FIFO/LIFO basis
1.2.2Aggregation of Short-term DTLs
1.2.2Reversal of DTLs that accrued before the Transition Year
1.2.25-year unclaimed accrual election
2.1.2Recalculated deferred tax where GloBE carrying value differs from accounting carrying value
2.1.2GloBE and accounting carrying values and the Transition Rules
2.1.2Additional provisions for Intragroup transactions accounted for at cost
2.1.2Exclusion of GloBE carrying value from SBIE
3.1.3General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps
3.1.3Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income
3.1.3Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries
4.1Extension of the Substitute Loss Carry-forward DTA to PEs, Hybrids and Rev Hybrids
4.2Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process
4.2.2Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids
4.2.3Exclusion of Blended CFC Tax Regime deferred tax assets or liabilities from transition rules
5.2.2Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity
5.3.2Non-group owners: Partially owned Flow-through Entities
5.3.5Non-group owners: Indirect minority ownership
5.4.2Taxes allocated to a flow through entity
5.5.2Hybrid entities – Taxes pushed down include indirect owners
5.5.4Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system
5.6.2Extension of taxes pushed down to include Reverse Hybrids
6.1.4Option to exclude a Securitization Entity from scope of QDMTT
6.1.4Option to not impose top-up tax liabilities on SPVs used in securitization transactions
6.1.4Amendments to the Switch-Off Rule
6.1.4New definition: Securitization Entity
6.1.4New definition: Securitization Arrangement

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 the 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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