The December 2022 Safe Harbour and Penalty Relief Guidance provided for a Simplified Calculations Safe Harbour. The aim being to reduce or simplify the number of computations and adjustments an MNE is required to make under the GloBE Rules.
The only simplified calculations that have currently been developed by the OECD are the Non-Material Constituent Entity (NMCE) Simplified Calculations.
A number of jurisdictions already include the Simplified Calculations Safe Harbour in their GloBE legislation (see our Pillar Two GloBE Guides), including:
– Austria
– Bulgaria
– Germany
– Ireland
– Luxembourg
– Romania
– UK
The December 2023 OECD Administrative Guidance provides further information on the NMCE Simplified Calculations (for the Simplified Calculations Safe Harbour).
NMCEs are constituent entities of an MNE Group that are not consolidated on a line-by-line basis in the MNE Group’s audited consolidated financial statements solely for size or materiality grounds. It also includes any permanent establishments of these entities (providing the Main Entity is itself an NMCE.)
It should be noted that an entity will only be considered a NMCE if an external auditor has agreed that the entity does not meet the materiality standards and has been excluded from the consolidation process on those grounds.
Where an entity’s revenue exceeds EUR 50 million, the entity will only be an NMCE if its financial accounts are prepared in accordance with an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard.
Given the significant practical difficulties MNEs may have in obtaining accurate reporting figures for NMCEs (as they aren’t included in the consolidated accounts), NMCEs can benefit from the following simplifications:
– The GloBE revenue and GloBE income of an NMCE is the total revenue of the NMCE as determined in accordance with the relevant CbC regulations.
– The adjusted covered tax of a NMCE is the income tax accrued as determined in accordance with the relevant CbC regulations (note that this excludes any deferred tax expenses, adjustments for non-current items and provisions for uncertain tax liabilities).
Relevant CbC Regulations are the Country-by-Country Reporting Regulations of the UPE Jurisdiction or of the surrogate parent entity jurisdiction if a Country-by-Country Report is not filed in the UPE Jurisdiction.
If the UPE jurisdiction does not have CbC requirements and an MNE Group is not required to file a CbC Report in any jurisdiction, Relevant CbC
Regulations are the OECD BEPS Action 13 Final Report and the OECD Guidance on the Implementation of Country-by-Country Reporting.
These simplified figures are then used for three tests under the Simplified Calculations Safe Harbour.
On August 26, 2025, Australia issued a list of jurisdictions that have qualified status for the purposes of the income inclusion rule and domestic minimum tax (including the QDMTT Safe Harbour).
On August 27, 2025, the Australian Taxation Office issued a draft legislative instrument (the ‘Taxation Administration (Exemptions from Requirement to Lodge Australian IIR/UTPR tax return and Australian DMT tax return) Determination 2025’). This outlines situations when entities within the scope of the Pillar 2 GloBE rules do not need to file an Australian DMT Return or an IIR/UTPR Return.
On August 20, 2025, the Romanian government issued a draft law for consultation. The law proposes amendments to various aspects of the Minimum Tax Act, including for the filing deadline for the designated filing entity nomination, transferable tax credits and the excess negative tax carry forward election.
The Finance Act 2025, enacted on August 8, 2025, introduces a new Sub-Part AF to the Income Tax Act to include a domestic minimum top-up tax (intended to be a QDMTT) from July 1, 2025.
On January 15, 2025, the OECD issued Administrative Guidance that includes a list of jurisdictions that have transitional qualified status for the purposes of the income inclusion rule and domestic minimum tax (including the QDMTT Safe Harbour). This was subsequently updated on March 31, 2025 and August 18, 2025.
On August 6, 2025, Germany issued the draft bill 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 March 20, 2025, the Swedish Ministry of Finance issued a proposal to amend the Global Minimum Tax Act. The final draft law was published by the government on August 14, 2025. The purpose of the draft law is to implement the provisions of the June 2024 OECD Administrative Guidance into domestic law.
On August 13, 2025, Canada issued draft legislative proposals to amend its Global Minimum Tax Act to provide for aspects of the June 2024 and January 2025 OECD Administrative Guidance.
Many jurisdictions will require GloBE registration for administrative purposes, however, the law issued to date has been inconsistent. We outline the GloBE registration obligations from the domestic legislation (enacted and draft) issued to date, with citations and links to relevant laws.
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