Under Article 5.5 of the OECD Model Rules, a constituent entity can make an annual election for a de minimis exclusion to apply so that there is no top-up tax for a fiscal year if:
• the average Pillar Two GloBE revenue of the jurisdiction for the current and the two preceding fiscal years is less than EUR 10 million; and
• the average net Pillar Two GloBE income or loss of the jurisdiction for the current and the two preceding fiscal years is a loss or is less than EUR 1 million.
In order for the de minimis rule to apply, all constituent entities in the jurisdiction are required to meet the requirements.
Where the de minimis exclusion applies, the MNE is not required to calculate adjusted covered taxes, the Pillar Two ETR or top-up tax for the jurisdiction.
Both the average Pillar Two GloBE income and revenue requirements are based on the same rules used to calculate the jurisdictional Pillar Two GloBE income.
Note that although the de minimis exclusion is calculated on a jurisdictional basis, minority-owned sub-groups are included for this purpose (unlike for standard jurisdictional blending purposes). Therefore, the average revenue and income of minority-owned subgroups are included. For more information on minority-owned subgroups, see Minority-Owned Entities
Under Article 5.5.2 of the OECD Model Rules, the de minimis exclusion is based on a three-year average for revenue and income, however, a year is excluded for the averaging calculation if:
• There are no constituent entities with a Pillar Two GloBE income or loss in the jurisdiction;
• There are no constituent entities in the jurisdiction; or
• The only constituent entities in the jurisdiction are dormant
If the fiscal years for the averaging calculation are different with some longer or shorter, a pro-rata calculation is made.
The first of the threshold tests for the de minimis exclusion uses Pillar Two GloBE revenue. This is not the same as Pillar Two GloBE income which is used for calculating the Pillar Two GloBE ETR.
Pillar Two GloBE revenue is defined in Article 10 of the OECD Model Rules, and is initially taken from the revenue for a constituent entity in preparing the consolidated financial accounts. As the de minimis exclusion is a jurisdictional election, the revenue of all constituent entities in the jurisdiction is added together (unless specifically excluded).
The financial accounting revenue figure is then adjusted for Pillar Two GloBE purposes based on adjustments that are used to calculate Pillar Two GloBE income. Not all of these adjustments would affect revenue as some would impact on the deductibility of expenses.
Key Pillar Two GloBE income adjustments that would impact on Pillar Two GloBE revenue for the purposes of the de minimis exclusion include:
• Income and gains excluded under the OECD’s version of a participation exemption (eg excluded dividends, capital gains)
• Excluded equity gains or losses
• Revaluation gains or losses
• Differences in exchange rate conversions between tax and accounting currencies
• Prior period changes
• The arms-length requirement for transactions between constituent entities in different jurisdictions
• Refundable tax credits where they are reflected in the current tax expense in the financial accounts
• Elections to exclude gains or losses from fair value accounting
• Elections to apply consolidated accounting treatment to constituent entities in the same jurisdiction
• Exclusions for international shipping and ancillary income
• Revenue allocated to a permanent establishment which is deducted from revenue of the main entity
• Tax transparent entities where income is allocated to members
If there is a requirement to recalculate the ETR for a previous year, this may (depending on the nature of the adjustment) impact on Pillar Two GloBE revenue or income for the previous year.
If a subsequent adjustment reduces Pillar Two GloBE revenue or income for a previous fiscal year below the relevant monetary threshold for the de minimis exclusion, this does not entitle the MNE to the de minimis exclusion.
However, if there is an increase in Pillar Two GloBE revenue or income for a previous fiscal year such that the de minimis thresholds are not met, there is a requirement to calculate the Pillar Two GloBE ETR and top-up tax for that relevant year.
The de minimis exclusion does not apply to stateless or investment constituent entities. As such their revenue and income are not included in the threshold tests for determining if the de minimis exclusion applies.
Under Article 5.5 of the OECD Model Rules, a constituent entity can make an annual election for a de minimis exclusion to apply so that there is no top-up tax for a fiscal year if:
• the average Pillar Two GloBE revenue of the jurisdiction for the current and the two preceding fiscal years is less than EUR 10 million; and
• the average net Pillar Two GloBE income or loss of the jurisdiction for the current and the two preceding fiscal years is a loss or is less than EUR 1 million.
Pillar Two GloBE revenue is defined in Article 10 of the OECD Model Rules, and is initially taken from the revenue for a constituent entity in preparing the consolidated financial accounts. As the de minimis exclusion is a jurisdictional election, the revenue of all constituent entities in the jurisdiction is added together (unless specifically excluded).
On 18 September 2026, Brazil issued IN RFB No. 2,342/2026 to introduce a new framework for the treatment of substance-based tax incentives under its Pillar Two rules.
On 15 September 2026, the Dutch government presented a bill that would introduce four new Pillar Two safe harbours, extend the Transitional Country-by-Country Reporting Safe Harbour and amend the treatment of certain 52- and 53-week accounting periods.
On September 11, 2026, the OECD released a package of guidance and implementation materials that provides for the exclusion of Explicitly Conditional Taxes from Covered Taxes, clarifies the treatment of mismatched fiscal periods under the Qualified Domestic Minimum Top-up Tax Safe Harbour, updates the GloBE Information Return and establishes the detailed framework for full legislative reviews of domestic minimum tax rules.
Uruguay’s presidential decree dated 31 August 2026 replaces the conditional QDMTT payment waiver in Decree No. 325/025 with a compensation mechanism. Article 1 requires in-scope constituent entities allocated QDMTT in Uruguay to comply with its QDMTT obligations and pay the tax; article 7 repeals the earlier decree.
Qatar has published six decisions dealing with currency conversion, simplified reporting, the Transitional CbCR Safe Harbour, non-material constituent entities, designated local entities and registration.
The Slovak Government has approved draft legislation that would make significant changes to Slovakia’s qualified domestic minimum top-up tax regime. The proposals would implement the OECD’s new Substance-Based Tax Incentives Safe Harbour, extend the Transitional CbCR Safe Harbour and introduce rules preserving Pillar Two filing and payment obligations where a Slovak taxpayer ceases to exist without a legal successor.
Cyprus has opened a public consultation on amendments to its Pillar Two legislation intended to address observations from the European Commission and align the domestic rules more closely with OECD guidance. The consultation opened on 30 July 2026 and is scheduled to close on 5 September 2026.
On August 7, 2026, Germany published a regulation that gives domestic legal effect to a jurisdiction-by-jurisdiction list of qualifying Pillar Two jurisdictions.
On August 8, 2026, Mauritius issued its QDMTT regulations to implement its QDMTT.
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