| Status | Enacted Law |
| Law | Government Regulation No. 55/2022 of December 20, 2022 Ministry of Finance Regulation Number 136 of 2024 of December 31, 2024 |
| Effective Date | Financial years beginning on or after January 1, 2025 |
| IIR | Yes (2025) |
| UTPR | Yes (2026) |
| QDMTT | Yes (2025) |
| Filing Deadlines | Standard |
| Safe Harbours | Transitional CbCR Safe Harbour, the Transitional UTPR Safe Harbour, and the Simplified calculations for Non-Material Constituent Entities Safe Harbour |
On December 31, 2024 the Ministry of Finance issued Minister of Finance Regulation Number 136 of 2024 regarding the imposition of a global minimum tax which will take effect from January 1, 2025.
On December 20, 2022, Indonesia issued Government Regulation No. 55/2022 on the Adjustment of Regulations in the Field of Income Tax. This included reference to the implementation of a global minimum tax in Indonesia as well as a desire to implement Pillar One.
GLOBE APPLICATION
General
The Regulation redrafts the GloBE provisions based on the provisions of the GloBE Model Rules. Whilst it does not reflect many aspects of the OECD Administrative Guidance, Section 72 of the Regulation includes a general interpretive provision that states that the application of the GloBE rules in the Regulation should be interpreted base on the OECD GloBE rules, unless specifically provided for in the Regulation.
For this purpose, the GloBE Rule are defined as being the relevant provisions as developed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which includes the:
-OECD Commentary;
-OECD Examples;
-OECD Agreed Administrative Guidance;
-OECD GloBE Information Return Guidance; and the
-OECD Safe Harbours and Penalty Relief Guidance.
The attachment to the Regulation includes some detailed examples on the application of the GloBE rules in Indonesia which also includes reference to aspects of the OECD Administrative Guidance that are not specifically stated in the text of the Regulation (eg Substitute Loss Carry-Forwards and Blended CFC Regimes). The attachment is referred to in the text of the Regulation as an integral part of the Regulation.
Administrative Guidance
The main text of the Regulation includes some aspects of the First and Second Set of OECD Administrative Guidance, including:
-Rebasing monetary thresholds in the GloBE Rules (1.1, AG1)
-Forex Hedge Election (2.2 AG1)
-Debt Relief (no election) (2.4 AG1)
-Equity Gain Inclusion Election (2.9 AG1)
-Restricted Tier 1 Capital (3.3 AG1)
-Portfolio Shareholding Election (3.5 AG1)
-Application of Tax Transparency Election to Mutual insurance companies (3.6 AG1)
-Substance-based Income Exclusion (Foreign rules and Leases) (3 AG2)
The examples contained in the Attachment to the Regulation also specify other aspects of the OECD Administrative Guidance that will be applicable in Indonesia, including:
-Blended CFC Regimes (2.10 AG1)
-Substitute Loss Carry Forwards (2.8 AG1)
-Detailed provisions for Pension Expenses (2.5 AG1)
-Deferred Tax Transitional Rules (4 AG1)
No aspects of the December 2023 Set of OECD Administrative Guidance (aside from Safe Harbours) or January 2025 Administrative Guidance is included in the Regulation. Certain aspects of the June 2024 Administrative Guidance (relating to Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity, as well as associated provisions including partially-owned flow-throughs and the allocation of taxes) are included in the Examples to the Regulation.
As noted above, Section 72 of the Regulation includes a general interpretive provision that states that the application of the GloBE rules in the Ministerial Regulation should be interpreted base on the OECD GloBE rules, unless specifically provided for in the Regulation. This includes the OECD Administrative Guidance.
Safe Harbour and Penalty Relief Guidance
Chapter XII of the Regulation includes the OECD Safe Harbours, including for the application of a Permanent Safe Harbour. The Permanent Safe Harbour applies where the constituent entity of an MNE group meets one of the three tests:
a. De-minimis;
b. Routine profit; or
c. Effective Tax Rate.
The de-minimis test is met if the Constituent Entity has an average income of the MNE Group in a country or jurisdiction of less than ten million Euros and an average net profit of the MNE Group of less than one million Euros or there is a Net Loss of the MNE Group in a jurisdiction, in the current Tax Year and the 2 previous tax years.
The routine profit test is met if the Constituent Entity has an MNE Group GloBE profit in a country or jurisdiction for a tax year equal to or less than the amount of Substance-Based Income Exclusion.
The Effective Tax Rate test is met if the Constituent Entity has an MNE Group Effective Tax Rate in a country or jurisdiction of at least 15% for a Tax Year.
It specifically includes the following Safe Harbours:
– Transitional CbCR Safe Harbour (Sections 56-61)
– Transitional UTPR Safe Harbour (Section 62)
– NMCE Safe Harbour (Section 63)
As noted above, Section 72 of the Regulation includes a general interpretive provision that states that the application of the GloBE rules in the Ministerial Regulation should be interpreted base on the OECD GloBE rules, unless specifically provided for in the Regulation. This includes the OECD Safe Harbour and Penalty Relief Guidance.
ELECTIONS
Elections in the OECD Model Rules
The Regulation includes all elections in the OECD Model Rules including the:
-Excluded Entity Election (Article 3(12), Regulation));
-Election to use the Realization Method (Article 22(3), Regulation));
-Stock-Based Compensation Election (Article 22(2), Regulation));
-Election to Spread Capital Gains (Article 22(4), Regulation));
-Consolidation Election (Article 22(5), Regulation));
-GloBE Loss Election (Article 35 Regulation);
-Tax Transparency Election (Article 49, Regulation);
-Taxable distribution Election (Article 50, Regulation);
-Unclaimed Accrual Election (Article 34(9), Regulation));
-Distribution Tax Regime Election (Article 47, Regulation));
-Substance-Based Income Exclusion Election (Article 10, Regulation);
-Prior Year Adjustment Election (Article 36(4), Regulation));
-De minimis Election (Article 11, Regulations).
Elections in the Administrative Guidance
The following elections in the OECD Administrative Guidance are included in the Regulation:
• Equity Investment Inclusion Election (21(13), Regulation));
• Foreign Exchange Hedge Election (21(11), Regulation));
• Portfolio Shareholding Election (21(10), Regulation)).
Note that the Excess Negative Tax Carry-Forward Election and the Debt Release Election are not specifically stated, however, an adjustment for debt relief is provided in Section 22(2) of the Regulation.
NEW ELECTIONS
None
DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE
Section 35(3) of the Regulation specifically provides that the GloBE Loss Election may only be made where the jurisdiction of the Constituent Entity:
a. does not apply corporate income tax;
b. has a corporate income tax rate less than 15%; or
c. does not apply deferred tax accounting.
Section 68(8) of the Regulation includes rules equivalent to Article 9.3.5 of the OECD Model Rules. This is an optional anti-avoidance rule for corporate inversions that jurisdictions can choose to implement or not. It relates to the 5 year exemption from the UTPR for groups in their initial phase of international operations.
There is the potential for an MNE group to use the UTPR transitional rules to avoid or minimise Pillar Two top-up tax.
This is because if an MNE group had its Ultimate Parent Entity (UPE) in a jurisdiction it would generally be subject to the Income Inclusion Rule (IIR) on low-taxed profits of its foreign constituent entities. However, the UTPR transitional rules treats all jurisdictions as having no UTPR top-up tax liability.
Therefore, a UPE could restructure the group to create a new UPE in a jurisdiction that did not implement an IIR. The UTPR would then not apply to its foreign subsidiaries providing the conditions were met for the UTPR transitional rule.
Therefore, Article 9.3.5 of the OECD Model Rules includes an optional provision that allows a jurisdiction to apply the UTPR to MNE groups that have a foreign UPE but significant operations in that jurisdiction. This is included in Section 68(8) of the Regulation.
DOMESTIC MINIMUM TAX
General
Chapter XI of the Regulation Act includes a domestic minimum tax (DMTT) that is intended to be a QDMTT. This allows Indonesia to levy top-up tax on the profits of low-taxed Indonesian-based entities of MNE groups that don’t have a UPE in Indonesia.
QDMTT Design Features
Section 53 of the Regulation provides that the DMTT applies to Domestic Constituent Entities and the starting point is that it is calculated in accordance with the general top-up tax provisions.
It is then adapted for DMTT purposes.
Ownership
In order for a domestic top-up tax to be a QDMTT, the OECD Administrative Guidance provides that Top-up Tax that is subject to the QDMTT must be based on the whole amount of the Jurisdictional Top-up Tax calculated, irrespective of the Ownership Interests held in the Constituent Entities located in the QDMTT jurisdiction by any Parent Entity of the MNE Group.
This is provided in Section 52(3) of the Regulation.
Investment Entities
53(2) of the Regulation includes investment entities in the scope of the DMTT.
Pushdown Taxes
The GloBE Model Rules stipulate that the Adjusted Covered Taxes for each Domestic Constituent Entity are to be calculated by including any tax accrued by a Constituent Entity-owner located in another jurisdiction with respect to the GloBE Income of a Domestic Constituent Entity. The GloBE rules that allocate taxes of a Constituent Entity-owner are:
-Article 4.3.2(a) of the GloBE Model Rules which allocates taxes to a Permanent Establishment;
-Article 4.3.2(c) of the GloBE Model Rules which allocates taxes to a controlled foreign company; and
-Article 4.3.2(d) of the GloBE Model Rules which allocates taxes to hybrid entities.
The February 2023 OECD Guidance provides that these allocations must be disregarded for a domestic minimum tax to qualify as a QDMTT.
In addition, it provides that taxes on dividends or other distributions that would otherwise be allocated to a distributing Domestic Constituent Entity under Article 4.3.2(e) of the Model GloBE Rules must also be excluded from the DMTT calculation (aside from domestic withholding tax).
Section 53(5)(g) of the Regulation excludes these allocations for the purpose of the Indonesian DMTT, however, it doesn’t yet reflect the proviso for allocation domestic withholding tax on dividends.
Provisions that Allocate Top-Up Tax
Provisions of the GloBE Model Rules that allocate Jurisdictional Top-up Tax to individual Constituent Entities do not apply, because the domestic minimum tax charges the total Jurisdictional Top-up Tax so it is not necessary to allocate this between Constituent Entities.
As such the specific provisions of the general top-up tax calculation that allocate jurisdictional taxes including Additional Tax, are not included for QDMTT purposes.
Specific Structures
Certain provisions of the Model GloBE Rules modify how the GloBE rules apply to certain structures. These do not need to be incorporated into the domestic minimum tax eg as they are specifically addressed elsewhere or they are not relevant for Indonesian tax purposes. This includes:
-Article 6.5.1(e) and (f) that describes how the IIR and UTPR is applied to a Multi-Parented MNE Group.
-Article 7.3 of the GloBE Model Rules (Eligible Distribution Tax Systems) as this only applies to a jurisdiction that had a distribution tax system prior to July 1, 2021.
-Article 9.3 of the GloBE Model Rules that applies an exclusion from the UTPR of MNE Groups in the initial phase of their international activity.
Separate ETR Calculations
Section 53(2) of the Regulation provides for separate Domestic Minimum Top-up Tax calculations for Minority-Owned Constituent Entities, Investment Entities, Domestic Joint Venture Groups and other Domestic Constituent Entities.
Accounting Standard
Article 53 of the Regulation provides that the DMTT is calculated based on the FANIL of the accounting standard used in the Consolidated Financial Statements of the UPE.
Registration
Section 65(5) of the Regulation provides that each Constituent Entity of the MNE Group within the scope of the GloBE rules in Indonesia must submit a GloBE Notification to the Director General of Taxes within 15 months after the end of the Tax Year. This must be submitted as an attachment to the Annual Income Tax Return. The notification is not required if a GloBE Information Return has been submitted.
Filing
The relevant aspects of the submission of a GloBE Information Return (GIR) are included in Section 65 of the Regulation.
Every Constituent Entity located in Indonesia will have an obligation to file a GIR in Indonesia. However, this obligation can be discharged if the GIR is filed by a Designated Filing Entity.
Where the GIR is being filed by the Designated Filing Entity, the Constituent Entity, must file a notification with the Tax Authority.
Section 65(8) of the Regulation also provides that a Domestic Constituent Entity need not submit the GIR if the tax authority is notified that the return has been submitted by:
-the UPE located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Indonesia for the reporting fiscal year; or
– a Designated Filing Entity located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Indonesia for the reporting fiscal year.
The GIR must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).
Section 65(11)/12) of the Regulation requires the submission of an IIR/UTPR/DMTT return within 4 months of the end of the following tax year.
Under Section 69(2) this is extended by 2 months in the transitional year. For instance, a constituent entity in scope for the 2025 tax year is required to file the IIR/UTPR/DMTT return by April 30, 2027 extended to June 30, 2027 for the transitional year.
Payment
Under Section 65(17) of the Regulation, payment of top-up tax must be made by the end of the tax year following the relevant fiscal year
Penalties
Under Section 66(1) of the Regulation, the general sanctions regime under the Tax Procedure Law applies for GloBE purposes.
Section 70 of the Regulation applies the transitional penalty relief provisions as outlined in the OECD Safe Harbours and Penalty Relief Guidance.
None issued.
| Indonesia | |||
|---|---|---|---|
| Effective Date: | Accounting periods beginning from January 1, 2025 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | 51, Regs | |
| 1.2 | Deemed consolidation test | ||
| 1.3 | Consolidated deferred tax amounts | ||
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | ||
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | ||
| 1.6 | Meaning of ancillary for Non-Profit Organisations | ||
| 2.1 | Intra-group transactions accounted at cost | ||
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | 21(11) Regs | |
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | ||
| 2.4 | Debt release Election | 22(2) Mentioned but no election | |
| 2.5 | Accrued Pension Expenses | Examples | |
| 2.6 | Covered Taxes on deemed distributions | ||
| 2.7 | Excess Negative Tax Carry-forward guidance | ||
| 2.8 | Substitute Loss carry forwards | Examples | |
| 2.9 | Equity Gain or loss inclusion election | 21(13), Regs | |
| 2.9 | Qualified Ownership Interest/Flow through entity | 21(13)-(15), Regs | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | Examples | |
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | ||
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | ||
| 3.3 | Restricted Tier 1 Capital | 25, Regs | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | ||
| 3.5 | Simplification for Short-term Portfolio Shareholdings | 21(10) Regs | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | 49(2), Regs | |
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | Examples | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | Examples | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | Examples | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | ||
| 2 | MTTCs | ||
| 3 | SBIE Rules | ||
| – Foreign rules | 7(6) Regs | ||
| Stock-based compensation election | |||
| Leases | 8(2) + Examples | ||
| – Impairment losses inc in tangible asset value | |||
| 4.1 | QDMTT Safe Harbour | ||
| 4.2 | UTPR Safe Harbour | 62, Regs | |
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | ||
| 2.2.1 | Transitional CbCR – JVs | ||
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | ||
| 2.3.2 | Transitional CbCR – Using different accounting standards | ||
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | ||
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | ||
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | ||
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | ||
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | ||
| 4.2.2 | Blended CFCs – not required to calculate an ETR | ||
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | ||
| 5.3 | 30 June 2026 Filing deadline | ||
| 6 | NMCE Simplified Calcs | 63, Regs | |
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | ||
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | ||
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | ||
| 1.2.1 | Exclusion of swinging accounts and separate tracking | ||
| 1.2.2 | FIFO/LIFO Basis | ||
| 1.2.3 | Aggregation of Short-term DTLs | ||
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | ||
| 1.2.2 | 5 year unclaimed accrual election | ||
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | ||
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | ||
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | ||
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | ||
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | Examples | |
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | Examples | |
| 5.3.5 | Non-group owners: Indirect minority ownership | Examples | |
| 5.4.2 | Taxes allocated to a flow-through entity | Examples | |
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | ||
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | ||
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | ||
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Indonesia | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Accounting Periods beginning on or after January 1, 2025 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | Generally included |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Transposed |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | No |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Yes, Section 53 |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Yes, Section 53 |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes, Section 53 |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes, Section 53 |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes, Section 53 |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | No |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | No |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | Yes – UPE a/c standard (s53) |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | Yes (no distribution tax election) |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes, Section 53 |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes, Section 53 |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes, Section 53 |
| GloBE Loss Election? | Not Required in QDMTT | Yes, Section 53 |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | Yes – 53(5)(g) |
| Exclude tax allocated to Hybrids | Second AG Guidance | Yes – 53(5)(g) |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | No |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes, Section 53 |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | Yes, Section 53 |
| Eligible Distribution Tax Systems | Second AG Guidance | No |
| ETR Computation for Investment Entities | Second AG Guidance | Yes, Section 53 |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes, Section 53 |
| Taxable Distribution Method Election | Second AG Guidance | Yes, Section 53 |
| Multi-Parented MNE Groups | Second AG Guidance | Yes, Section 53 |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes, Section 53 |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Yes, Section 53 |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes, Section 53 |
| SBIE Included? | Not Required in QDMTT | Yes, Section 53 |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes, Section 53 |
| De Minimis Rule Included? | Not Required in QDMTT | Yes, Section 53 |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes, Section 53 |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Yes, Section 53 |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes, Section 53 |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes, Section 53 |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | No |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes, Section 53 |
| Deferred Tax transition: First time or refreshing rule? | Second AG | No |
| New transition year – amend tax attributes? | Second AG | No |
| Currency provisions? | Second AG | No |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | No |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | No |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | No |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | No |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | No |
| Note | No |
NA
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