Pillar Two: Intra-Group Transfer of Assets

Contents

  1. Intra-Group Transfers of Assets, Generally
  2. Example: Negative Goodwill
  3. GloBE Reorganization
  4. Purchase Accounting Adjustments
  5. Deemed Disposal of Assets
Intra-Group Transfers of Assets, Generally

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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FAQs

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).

 

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