
Japan Issues Updated GloBE Information Return
On June 30, 2025, Japan issued its updated GloBE Information Return (GIR) to reflect the OECD GIR changes in January 2025.
The treatment under the Pillar Two GloBE rules depends on whether there is an increase or decrease in the covered taxes and the amount of the adjustment.
Prior year increases in covered taxes are treated as an adjustment to the current year’s covered taxes under Article 4.6.1 of the OECD Model Rules.
Prior year decreases in covered taxes require a recalculation of the ETR and top-up tax in the previous year that the adjustment relates to. However, where a reduction is less than 1 million euros the MNE can elect for this to be adjusted in the current year.
The carryback of a local tax loss that gave rise to a refund of tax or other reduction in tax payable in the previous year would also be treated as a decrease in covered taxes.
However, there are special provisions for deferred tax that apply to loss carrybacks, for more information, see Deferred Tax.
These rules mirror the treatment for prior year adjustments to Pillar Two GloBE income and ensure that both the income and tax are aligned in the same fiscal year for the ETR calculation.
A change in domestic tax rates is not taken into account in the current year but could have deferred tax implications.
Where there is a reduction to the domestic tax rate below the 15% global minimum rate, deferred tax in a previous year may need to be recomputed under Article 4.6.2 of the OECD Model Rules.
For instance, if a deferred tax liability of 1 million euros is created in year 1 at a corporate income tax rate of 20%, this would result in adjusted covered tax of 200,000 euros. In year 2, the domestic tax rate is reduced to 10%.
The deferred tax liability in year 1 would need to be recomputed based on the 10% rate, with the adjusted covered tax being 100,000 euros. Additional top-up tax of 100,000 euros would therefore be due.
In this case, the amount is not material and would be due in year 2. If it was material, the ETR and top-up tax in year 1 would be amended.
Where there is an increase in the domestic tax rate, this could require an adjustment to the deferred tax expense in a previous year under Article 4.6.3 of the OECD Model Rules. In general, an increase in the rate that applies to a deferred tax liability is disregarded until the liability is unwound and the tax is paid.
The additional tax payable is then treated as an increase in covered taxes in the previous year.
Just as for deferred tax that is not unwound, a recapture rule applies to a current tax expense that is claimed as adjusted covered tax and is not paid under Article 4.6.4 of the OECD Model Rules. This applies where the unpaid tax is more than 1 million euros.
Unlike deferred tax, a three-year recapture rule applies (it is five-years for deferred tax).
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.
Section 26 of the amendment law in the 2025 Spring Tax Package (approved on June 19, 2025), amends the registration deadline to the last day of the second month following the last day of the tax year.
On June 19, 2025, the updated version of the Global Minimum Tax (Pillar Two) Order 2024 was published.
On June 16, 2025, Slovakia issued a draft law to amend its minimum tax act to provide for the June 2024 and January 2025 OECD Administrative Guidance, as well as EU Directive DAC 9 amendments.
On June 20, 2025, a draft Order 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 16, 2025, the Norwegian Ministry of Finance opened a consultation on a Draft Bill to amend the Norwegian Minimum Tax Act for the June 2024 and January 2025 OECD Administrative Guidance.
On June 3, 2025, the draft Pillar 2 forms were issued for public consultation. This includes Form 240 (registration), Form 241 (the GIR) and Form 242 (the top-up tax return).
On June 5, 2025, Iceland issued a Draft Minimum Tax Bill for consultation. The Draft Bill includes an Income Inclusion Rule (IIR) and a domestic minimum tax from January 1, 2026.
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