
South Korea to Apply a QDMTT from January 1, 2026
South Koreas 2025 Tax Reform Proposal (announced on July 31, 2025), provides that a QDMTT will be applied from January 1, 2026.
Article 2.10 of the February 2023 OECD Administrative Guidance provides more information on the treatment of the US Global Intangible Low-Taxed Income (GILTI) regime.
This is to be treated as a blended CFC Regime for GloBE purposes. Under the GloBE Rules CFC taxes are allocated to the foreign CFC (subject to the push down restriction). The GloBE Commentary doesn’t go into detail on the allocation and just provides that the CFC tax should be allocated to each CFC based on the owner’s share of the underlying income.
However, determining the allocation can be tricky when there is a blended CFC regime.
The December 2023 OECD Administrative Guidance provides additional information on the application of the Blended CFC rules, including:
– where an MNE Group calculates multiple GloBE Jurisdictional ETRs for different types of Entities located in the same jurisdiction (eg a separate GloBE ETR for investment entities or JVs),
– where an MNE Group is not required to calculate an ETR as they claim the Transitional CbCR Safe Harbour or the QDMTT Safe Harbour, or if the De Minimis exclusion applies
– where a Constituent Entity is subject to a Blended CFC Tax Regime on the income of non-GloBE Entities.
SubCo1: 20,000/520,000 * 1.5 million = 57,692 euros
SubCo2: No Allocation
SubCo3: 500,000/520,000 * 1.5 million = 1,442,308 euros
Subsco1CE: 15,000/520,000 * 1.5 million = 43,269 euros
SubCo2: No Allocation
SubCo3: 500,000/520,000 * 1.5 million = 1,442,308 euros
South Koreas 2025 Tax Reform Proposal (announced on July 31, 2025), provides that a QDMTT will be applied from January 1, 2026.
On July 24, 2025, the Luxembourg Government issued:
– a draft law to amend its Minimum Tax Law to provide for the January 2025 OECD Administrative Guidance and the EU DAC 9 GIR filing requirements: and
– a draft Regulation which includes the format of the GIR
On July 16, 2025, Kuwait updated its electronic registration portal to include Pillar 2 registration for in-scope groups.
The Pillar Two effective tax rate (ETR) calculation for investment entities is similar to the standard ETR calculation, however, there is an important twist in that the top-up tax is adjusted for minority interests. There is no adjustment for minority interests under the standard ETR calculation. In this article we look at the impact of this.
Foreign tax credits interact with the Pillar Two GloBE Rules in a number of ways. In this article we assess the key impact.
In most cases, a Qualifying Refundable Tax Credit will result in a higher Pillar Two effective tax rate than a non-qualifying tax credit. However, this is not always the case. We look at some examples in this article.
On July 9, 2025, ANAF Order 1.729/2025 was issued to nominate a single designated entity for QDMTT filing and payment purposes, if there are several constituent entities in Romania that are part of the same group.
On June 30, 2025, Japan issued its updated GloBE Information Return (GIR) to reflect the OECD GIR changes in January 2025.
The Executive Regulations were issued on June 29, 2025, in Ministerial Resolution No. 55 of 2025. The Regulations provide for the detailed rules for the application of the domestic minimum top-up tax from January 1, 2025.
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