Computation of Effective Tax Rate and Top-up Tax

<< Go back to overview Next article>> Article 5.6. Minority-Owned Constituent Entities Special rules are included in Article 5.6 for computing the ETR and Top-up Tax of Minority-Owned Constituent Entities. A Minority-Owned Constituent Entity is a Constituent Entity of the MNE Group where the UPE holds directly or indirectly [...]

Article 5.5. De minimis exclusion Article 5.5 provides a jurisdictional exclusion for LTCEs of an MNE Group when both (i) the aggregated income and (ii) the revenue of those entities do not exceed agreed monetary thresholds. Article 5.5.1 sets out the effects of the exclusion as well as the required conditions to benefit [...]

<< Go back to overview Next article>> Article 5.4. Additional Current Top-up Tax Certain provisions of the GloBE Rules, ETR Adjustment Articles, require or permit a retroactive recalculation of the ETR and Top-up Tax for a previous Fiscal Year or Fiscal Years taking into account an adjustment to the [...]

Article 5.3. Substance-based Income Exclusion The policy rationale behind a formulaic, substance-based carve-out, based on payroll and tangible assets is to exclude a fixed return for substantive activities within a jurisdiction from the application of the GloBE Rules. The use of Payroll and Tangible Assets as indicators of substantive activities is justified because [...]

Article 5.2. Top-up Tax Article 5.2 sets out the rules for determining the amount of Top-up Tax that is due with respect to a jurisdiction and how such Top-up Tax is allocated amongst the LTCEs located in that jurisdiction. The rules in Article 5.2.1 first determine the Top-up Tax Percentage, which is the [...]

<< Go back to overview Next article>> Article 5.1. Determination of Effective Tax Rate The ETR computation in Article 5.1 is a central element of the GloBE Rules. It is used both to determine whether in a Fiscal Year, the MNE Group is subject to a minimum level of [...]