As with most aspects of the GloBE Rules, Article 6.3.1 of the OECD Model Rules provides that the GloBE treatment of intra-group transfers of assets follows the accounting treatment.
The accounting treatment generally values the transfer of assets at fair value (eg FRS 102 requires the total fair value of any consideration as well as the assets, liabilities and contingent liabilities of the acquirer to be determined).
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As with most aspects of the GloBE Rules, Article 6.3.1 of the OECD Model Rules provides that the GloBE treatment of intra-group transfers of assets follows the accounting treatment.
The accounting treatment generally values the transfer of assets at fair value (eg FRS 102 requires the total fair value of any consideration as well as the assets, liabilities and contingent liabilities of the acquirer to be determined).
Given many domestic tax regimes permit gains and losses to be deferred on intra-group transfers, Article 6.3.2 of the OECD Model Rules include a similar rule which applies where there is a ‘GloBE Reorganisation’.
A Globe Reorganisation occurs where there is a transfer of assets and:
(a) the consideration for the transfer is, in whole or in significant part, equity interests
(b) the transferors gain or loss on the assets is not wholly or partly subject to tax; and
(c) the tax law applicable to the transferee entity requires them to use the transferor’s tax base as the carrying value of the assets (the so-called ‘stand in the shoes’ principle).
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Bahrain for accounting periods beginning on or after January 1, 2025. Updated for Decree-Law No. (11) of 2024 issued on September 1, 2024.
On September 4, 2024, the Swiss Federal Council announced that the Income Inclusion Rule (IIR) will apply from January 1, 2025.
The substance-based income exclusion favours capital intensive and certain low profit margin companies. These companies stand to benefit the most.
Whilst the treatment of investment property for financial accounting purposes is important when determining the GloBE treatment, of even more importance are any differences between the financial accounting treatment and the domestic tax treatment.
On August 20, 2024, the German Ministry of Finance issued a Discussion Draft of a Draft Law to implement most aspects of the Third Set of OECD Administrative Guidance.
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in The Bahamas for accounting periods beginning on or after January 1, 2025. Updated for the draft legislation issued by The Bahamas Government on August 12, 2024.
Analysis of the domestic implementation of the Pillar Two Global Minimum Tax rules in Jersey for accounting periods beginning on or after January 1, 2025. Updated for the draft legislation issued on August 14, 2024.
Updated Pillar 2 GloBE guide for Austria following OECD Administrative Guidance, including currency provisions and extending the Transitional CbCR Safe Harbour to cases where an MNE is not required to prepare CbC
On August 12, 2024, the Finnish government issued draft legislation to amend the Minimum Tax Act to reflect numerous aspects of the OECD Administrative Guidance. The draft law is subject to a consultation until September 6, 2024, and once enacted will apply from January 1, 2024.
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