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) that deems the top-up tax for a jurisdiction to be zero insofar as it relates to ‘Qualified Tax Incentives’ (QTIs).
The Top-up Tax that relates to QTIs is the difference between:
(i) the Top-up Tax for the jurisdiction calculated with the amount of QTIs used in the year being added to covered taxes (subject to a cap), and
(ii) the Top-up Tax if the SBTI Safe Harbour election hadn’t been made.
A QTI is defined as a generally available tax incentive calculated based on expenditure incurred, or on the amount of tangible property produced in the jurisdiction.
The SBTI Safe Harbour is to apply from fiscal years beginning from January 1, 2026.
Aside from the main election for the SBTI Safe Harbour to apply, the detailed rules for this contain two additional elections.
Tax Credits Election (Art 4)
An MNE group can make an annual election to treat a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit as a QTI.
Substance Cap Election (Art 4)
The substance cap referred to above for determining the amount added to covered taxes is generally 5.5% of the higher of (1) Eligible Payroll Costs in the jurisdiction or (2) the depreciation and depletion recorded in FANIL for Eligible Tangible Assets located in the jurisdiction.
However, an MNE group can make a 5 year election for the jurisdiction for the substance cap to be 1% of the carrying value of Eligible Tangible Assets located in the jurisdiction (excluding land and other non-depreciable assets) for that Fiscal Year
A guide to Italy’s three-track Pillar Two process: the reporting-entity notification, the DAC9/GIR (Comunicazione Rilevante), and the domestic GloBE Return (Dichiarazione fiscale Globe) with related F24 payments.
A guide to Australia’s Pillar Two filing. It covers the separate local GIR XML filing, the foreign lodgement notification, and the Combined Global and Domestic Minimum Tax Return (CGDMTR), including the Australian IIR/UTPR tax return and Australian DMT tax return. It also flags the main ATO validation rules and the software / API points that matter if you are building or testing a filing process.
A guide to Spain’s three-part Pillar Two workflow: model 240 (group/filing notification), model 241 (GIR-DAC9 information return), and model 242 (top-up tax self-assessment).
On April 7, the Swiss Federal Tax Administration issued Communication-031-E-2026-f and Communication-030-E-2026-f to apply the OECD January 2025 and January 2026 Administrative Guidance
On April 8, 2026, Germany issued a Draft Regulation which included a list of jurisdictions with qualifying status for the purposes of the IIR, UTPR, QDMTT and the QDMTT Safe Harbour.
On April 8, 2026, the Turkish Revenue Administration published draft versions of its Pillar Two Tax Returns/Notifications.
On April 3, 2026, Liechtenstein enacted an amendment to its Pillar Two Regulation (LGBl. 2026 Nr. 114). This includes amendments to the Pillar Two regime including providing for aspects of the January 2026 Side-by-Side tax package.
A guide to Vietnam’s Pillar Two compliance flow: the reporting-entity notification, special tax registration, the GIR information package embedded in the Vietnamese filing package, and the QDMTT and IIR return packages filed through the tax e-filing system.
This guide focuses on Austria’s GIR filing architecture as published by the Austrian Federal Ministry of Finance (BMF): access to FinanzOnline, filing channels, the Austrian national XML overlay on top of the OECD GIR, correction mechanics, and transport/protocol handling for implementation.
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