This is a new Safe Harbour included in the January 2026 OECD Side-by-Side Tax Package (see: Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Side-by-Side Package).
Side-by-Side (SbS) Safe Harbour
The SbS Safe Harbour excludes an MNE group from the IIR and UTPR (not QDMTT) where its UPE is located in a qualifying SbS jurisdiction. A qualifying SbS jurisdiction is a jurisdiction that has an eligible domestic tax regime and an eligible worldwide tax regime (generally required to be in place before January 1, 2026) as well as providing a FTC for QDMTTs.
Various conditions are required to be met for a tax system to qualify as an eligible domestic tax system or an eligible worldwide tax regime (eg for an eligible domestic system its statutory nominal CIT rate is at least 20%), however in both cases there must not be a material risk that the GloBE ETR would be below 15%.
Whether a jurisdiction qualifies as a qualifying SbS regime will be determined by the OECD and the jurisdiction will be included in the Central Record (similar to how DMTTs that qualify as QDMTTs etc are). To date only the USA is recognised by the OECD as a qualifying SbS regime.
The SbS Safe Harbour will apply for Fiscal Years from January 1, 2026.
UPE Safe Harbour
The UPE Safe Harbour is similar to the SbS Safe Harbour but only applies to exclude an MNE group from the UTPR on profits located in the UPE jurisdiction. However to qualify a jurisdiction only needs to have an eligible domestic tax regime (not an eligible worldwide tax regime as required for the SbS Safe Harbour).
As with the SbS Safe Harbour, Qualified UPE Regimes will be listed in the OECD Central Record and this Safe Harbour will apply from January 1, 2026.
On January 5, 2026, the OECD Released Guidance on amendments to the Pillar 2 rules for the Side-by-Side Tax Package. This includes a new Substance-based Tax Incentive Safe Harbour. This online tool shows how the new safe harbour operates.
On January 5, 2026, the OECD Released Guidance on amendments to the Pillar 2 rules for the Side-by-Side Tax Package. This article looks at a number of the new elections that arise from this.
On January 5, 2026, the OECD Released Guidance on amendments to the Pillar 2 rules for the Side-by-Side Tax Package.
On December 23, 2025, Germany enacted a law to amend the Minimum Tax Act. This follows the two previous discussion drafts and now includes the January 2025 OECD Administrative Guidance and DAC9 amendments.
On December 23, 2025, Austria published the Tax Amendment Act 2025 in its Official Gazette. This includes amendments to aspects of the December 2023, June 2024 and January 2025 OECD Administrative Guidance, as well as DAC 9 implementation.
Part III of the Dutch Year-End Decree 2025 (published in the Official Gazette on December 23, 2025) amends the Minimum Tax Executive Decree 2024 for aspects of the December 2023, June 2024, and January 2025 OECD Administrative Guidance.
On December 30, 2025, IRAS issued further details on the Pillar 2 registration process. The registration portal is to be open from May 2026, however, a draft registration form and explanatory notes have been issued.
On December 26, 2025, Turkey published the Communique on the Minimum Tax Law. Whilst Turkey has enacted its Minimum Tax Law, a lot of the detailed application of the GloBE rules was left to a further Regulation. This Communique therefore provides for the detailed rules for the implementation of the GloBE rules in Turkey.
On December 19, 2025, the Danish Official Gazette published an Executive Order providing for GIR information reporting requirements and on December 17, 2025, the Danish Official Gazette published Law No. 1643 to amend the Minimum Tax Act.
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