Article 8.1.1

5. Under the first sentence of Article 8.1.1, each Constituent Entity of an MNE Group would be required to prepare a GloBE Information Return and file it with its tax administration. Where there are two or more Constituent Entities located in the same jurisdiction, the second sentence of Article 8.1.1 allows one of them, i.e., the Designated Local Entity, to file a single GloBE Information Return on behalf of the others (and itself). When a Designated Local Entity files a GloBE Information Return on behalf of other Constituent Entities located in the same jurisdiction, the obligation of those Constituent Entities to file their own return is discharged. Although Article 8.1 places the default filing obligation on each local Constituent Entity, it would be acceptable for implementing jurisdictions to make a Designated Local Entity the sole Constituent Entity that is legally responsible for this filing obligation, provided this approach achieves the intended purpose of ensuring an information return is filed on behalf of the MNE Group.

6. The first sentence of Article 8.1.1 requires a Constituent Entity located in the implementing jurisdiction to file the GloBE Information Return. A Stateless Constituent Entity, such as a Flow-through Entity that is not a UPE, would not be required to file this return because it is not located in the implementing jurisdiction. For example, a partnership that is a Flow-through Entity and is not treated as tax resident in the jurisdiction where it is organized would not generally be required to submit a GloBE Information Return. In most cases this is consistent with its tax treatment in the jurisdiction where it was organized. However, the Constituent Entity-owners of the Flow-through Entity would be required to submit a GloBE Information Return as would any other Constituent Entity located in a jurisdiction by virtue of the first sentence of Article 8.1.1. Where the Flow-through Entity is the UPE or is required to apply the IIR, it would be located in the jurisdiction where it was created in accordance with Article 10.3.2(a) and therefore, it would be required to submit a GloBE Information Return. In these cases, the GloBE Information Return could be filed by an authorised entity such as a trustee or manager on behalf of the Flow-through Entity. Similarly, PEs are Constituent Entities required to file a GloBE Information Return in the jurisdiction where they are located.

7. In some cases, a Flow-through Entity may have some formal obligations under domestic tax law such as submitting information returns. In these situations, jurisdictions are free to extend the obligation in Article 8.1.1 to such Entities provided that they are created under their domestic law.

8. An Entity treated as a JV in the Consolidated Financial Statements of an MNE Group is not required to submit a GloBE Information Return in accordance with Article 8.1.1, because it is not a Constituent Entity of that MNE Group despite being treated as such solely for purposes of the computation of its Top-up Tax in accordance with Article 6.4.1 (a). For the same reasons, an Entity treated as a JV Subsidiary by an MNE Group is not required to submit a GloBE Information Return for that Group.

Article 8.1.2

9. Article 8.1.2 states that all Constituent Entities (including the Designated Local Entity) are discharged from the requirement to file a GloBE Information Return if the return has been filed by the UPE or by a Designated Filing Entity appointed by the MNE Group provided that the Competent Authority of the jurisdiction in which the Filing Constituent Entity is located has a Qualifying Competent Authority Agreement with the Competent Authority of the jurisdiction where the Constituent Entity is located. Thus, by reason of the Qualifying Competent Authority Agreement, the Competent Authority of the jurisdiction where the Constituent Entity is located should obtain the GloBE Information Return on an automatic basis from the Competent Authority of the jurisdiction where the UPE or Designated Filing Entity is located.

10. The information exchange mechanism allowed under Article 8.1.2 means that many, and perhaps most, tax administrations will receive the GloBE Information Return through an exchange of information mechanism and that a local filing obligation will only apply, in practice, where the return has not otherwise been filed in a jurisdiction with a Qualifying Competent Authority Agreement. The Qualifying Competent Authority Agreement mechanism allows the MNE Group to minimise compliance burdens by having the UPE, or appointing a single Designated Filing Entity, to prepare and file the GloBE Information Return centrally for distribution to tax administrations in other jurisdictions. While in many cases the UPE will fulfil this function of filing returns on behalf of the Group Entities, there may be reasons why another Constituent Entity is better placed to do so and, therefore, the MNE Group may appoint another Constituent Entity as the Designated Filing Entity. For example, the jurisdiction where the Designated Filing Entity is located may have a wider network of international exchange agreements in effect and therefore a greater ability to reduce the local filing obligations throughout the MNE Group.

11. The term “Qualifying Competent Authority Agreement” is defined in Article 10.1. It means a bilateral or multilateral agreement or arrangement between Competent Authorities that provides for annual automatic exchange of information that is included in the GloBE Information Return. Bilateral and multilateral models for the Qualifying Competent Authority Agreement would be developed as part of the GloBE Implementation Framework and would be based on the Convention on Mutual Administrative Assistance in Tax Matters, a Tax Information Exchange Agreement, a Tax Treaty with a provision equivalent to Article 26 of the OECD Model Tax Convention or any other international agreement that allows automatic exchange of information. In order to prevent the MNE Group from being required to file a GloBE Information Return in each of the jurisdictions where it has a Constituent Entity, jurisdictions adopting the GloBE Rules are encouraged to enter into Qualifying Competent Authority Agreements with interested appropriate partners adopting the GloBE Rules. If a Competent Authority has not received the GloBE Information Return in accordance with a Qualifying Competent Authority Agreement, and the Competent Authority has complied with the applicable notification and other procedures in the Qualifying Competent Authority Agreement, then, subject to the terms of the Qualifying Competent Authority Agreement, the conditions in Article 8.1.2 would not be met. To provide notification to Constituent Entities, each jurisdiction should publish and periodically update a list of the jurisdictions of the Competent Authorities with respect to which it has Qualifying Competent Authority Agreements in effect.

Article 8.1.3

12. Article 8.1.3 requires a Constituent Entity (either directly or through a Designated Local Entity) to notify its local tax administration of the identity and location of the UPE or the Designated Filing Entity that will be filing the GloBE Information Return. This provides the tax administration with notice that it will receive the return through information exchange channels.

Article 8.1.4

13. Article 8.1.4 states that the GloBE Information Return has to be filed in a standard template that is developed in accordance with the GloBE Implementation Framework and sets out the items of information that should be included in the GloBE Information Return. As indicated below, the information required by the GloBE Information Return could be specified, expanded or restricted in accordance with the GloBE Implementation Framework. While Article 8.1.4 relates to information in the GloBE Information Return, it is not intended to prevent a local tax administration from requesting further necessary supporting information to verify the compliance to the GloBE Rules in accordance with its domestic law. It is anticipated that a standard template of the GloBE Information Return that is developed in accordance with the GloBE Implementation Framework will contain fields for all of the required information.

14. Paragraph (a) requires the GloBE Information Return to identify the Constituent Entities of the MNE Group, their location, and their tax identification numbers (if they exist). It also requires the GloBE Information Return to identify their status under the GloBE Rules (e.g., a POPE, JV, JV subsidiary, Investment Entity, Flow-through Entity, and PE). For example, it should identify the Designated Filing Entity (if any) and whether an Entity qualifies as Investment Entity under the GloBE Rules. Stateless Constituent Entities should be identified pursuant to paragraph (a).

15. Paragraph (b) requires the GloBE information Return to include information on the overall corporate structure of the MNE Group. As part of the GloBE Implementation Framework, it will be decided whether the overall corporate structure of the MNE Group is included as a diagram and/or as a list so that tax administrations can identify how the corporate structure of the MNE Group is organized. It shall identify which Constituent Entities are holding the Controlling Interests of other Constituent Entities. If the corporate structure changes during the Fiscal Year, the diagram and/or list shall identify those changes.

16. Paragraph (b) requires information on the overall corporate structure of the MNE Group, which would include Entities that are Excluded Entities when they are part of such Group. In these situations, paragraph (b) also requires that these Excluded Entities are identified within the corporate structure notwithstanding that they are not Constituent Entities. The information provided in accordance with this paragraph only reflects how the corporate structure of the MNE Group is organized. For example, the information on the corporate structure does not provide information on an Excluded Entity other than the information that is necessary to identify the location of the Excluded Entity in the overall corporate structure.

17. Paragraph (c) requires the GloBE Information Return to include the information needed to compute the ETR (including the Financial Accounting Net Income or Loss, the type and amount of the adjustments applied in conformity with Article 3.2 to determine the GloBE Income or Loss, and the amount of Covered Taxes) and the Top-up Tax of Constituent Entities and any JV or JV Subsidiary. For example, this may also include the information required for purposes of applying the De Minimis Exclusion, if elected under Article 5.5.1 or a GloBE Safe Harbour elected under Article 8.2.

18. Paragraph (c) also requires that the GloBE Information Return contains the Top-up Tax allocation under the IIR and UTPR in each jurisdiction as provided for under Chapter 2. The following paragraphs identify information that must be included in the GloBE Information Return with respect to the Top-up Tax allocation under the IIR and the UTPR in each jurisdiction, but other information may be necessary as well.

19. In the case of the IIR, the GloBE Information Return should include the information necessary to compute the allocation of the Top-up Tax in accordance with the top-down approach and split-ownership rules of Article 2.1. Furthermore, the GloBE Information Return should include the information for determining the Parent Entity’s Allocable Share of the Top-up Tax of each LTCE in accordance with Article 2.2. Lastly, the GloBE Information Return should include the information and computation of the reduction of Top-up Tax under Article 2.3 due to the application of a Qualified IIR by a lower-tier Parent Entity.

20. In the case of the UTPR, the GloBE Information Return should include the information necessary to determine the Total UTPR Top-up Tax Amount for a Fiscal Year in accordance with Article 2.5.1 and the allocation of that amount among UTPR Jurisdictions in accordance with Article 2.6. The GloBE Information Return should include the basis for allocation of the Total UTPR Top-up Tax Amount for the Reporting Fiscal Year, including the relevant information on Number of Employees and Tangible Assets necessary to apply the formula provided under Article 2.6.1. The return should also report the amount of Top-up Tax carried forward from a prior taxable year when the UTPR adjustment in a UTPR Jurisdiction has not yet resulted in an additional cash tax expense equal to the Top-up Tax amount for the Constituent Entities located in that jurisdiction. Furthermore, the return should report the amount of the additional cash tax expense that results from the application of the UTPR under Article 2.4.1 and any amount of Top-up Tax that needs to be carried forward to the next taxable year in accordance with Article 2.4.2.

21. Paragraph (d) requires information regarding any elections made in accordance with the relevant provisions of the GloBE Rules, such as, the elections made in accordance with Article 5.5.1 with respect to the De Minimis Exclusion.

22. Paragraph (e) requires the inclusion of other information necessary to carry out the administration of the GloBE Rules and that is agreed as part of the GloBE Implementation Framework. However, as stated at the beginning of Article 8.1.4, the information contained in the GloBE Information Return could be then specified, expanded or restricted in accordance with the GloBE Implementation Framework. Furthermore, this could include the development of a simplified reporting procedure in cases where not all the information is required for the purpose of assessing the application of the GloBE Rules.

23. Generally, information on Excluded Entities shall not be included in the GloBE Information Return because such Entities will not be Constituent Entities of an MNE Group and will therefore be outside the scope of the GloBE Rules. If the whole MNE Group is composed exclusively of Excluded Entities and therefore outside the scope of the GloBE Rules, then there is no obligation to submit a GloBE Information Return because there are no Constituent Entities required to submit a GloBE Information Return under Article 8.1.1. In other cases, where Excluded Entities form part of an MNE Group that is within the scope of the GloBE Rules, Article 8.1.4(b) will generally require those Excluded Entities to be identified as part of the overall corporate structure. Guidance developed under the GloBE Implementation Framework could further specify, expand or restrict the information requirements in respect of such Entities. Any information requirements with respect to Excluded Entities developed under the GloBE Implementation Framework should be limited to what is reasonably necessary for the proper administration of the GloBE Rules and in line with requirements of public policy. For example, the Excluded Entity could provide a certification by the tax authority of the jurisdiction where the Excluded Entity is established or resident.

Article 8.1.5

24. Article 8.1.5 states that the GloBE Information Return shall apply the definitions and instructions contained in the standard template that is developed in accordance with the GloBE Implementation Framework. These definitions and instructions would be developed by the members of the Inclusive Framework on BEPS.

Article 8.1.6

25. In order to allow MNE Groups time to prepare the required information, Article 8.1.6 provides MNE Groups with up to 15 months after the last day of the Reporting Fiscal Year to file the GloBE Information Return and the notifications with the relevant tax administrations. The timing for filing notifications is aligned with the timing for filing the GloBE Information Return (i.e. within 15 months after the last day of the Reporting Fiscal Year). This gives a Constituent Entity or a Designated Local Entity ample opportunity to notify its local tax administration of the identity and location of the UPE or Designated Filing Entity that will be filing the GloBE Information Return on its behalf.

26. There is no special provision under Article 8.1 regarding amendments to a GloBE Information Return. It is left to jurisdictions to decide whether their current domestic rules regarding amendments to tax or information returns will apply to the GloBE Information Return, or to introduce new provisions that apply only to the GloBE Information Return. Further guidance will be provided as part of the GloBE Implementation Framework regarding amendments to the GloBE Information Return, including the time frame and the method for the filing and exchange of information between Competent Authorities.

Article 8.1.7

27. Article

8.1.7 provides that a tax administration may modify the information, filing and notification requirements in respect of the GloBE Information Return where this is agreed as part of the GloBE Implementation Framework. This provision is intended to provide some flexibility to jurisdictions and their tax administrations in the implementation of the filing and notification requirements that are developed under the GloBE Implementation Framework (including additional, simplified or modified filing requirements) but after the enactment of the legislation, regulations, or other guidance implementing the GloBE Rules. As with other aspects of these rules, however, jurisdictions maybe constrained, due to their legislative or regulatory framework, to introduce amending legislation to change the filing requirements, rather than relying on a delegated authority to the Ministry of Finance or its equivalent, or the tax administration.

Article 8.1.8

28. Article 8.1.8 requires that the laws of each jurisdiction with respect to penalties, sanctions, and confidentiality of the returns (including the information in the returns) shall also apply to the GloBE Information Return. In the case of penalties and sanctions, this means that domestic penalties and sanctions would apply if the GloBE Information Return is not submitted on time or if there is any false or incomplete information. Jurisdictions are free to extend existing penalties or sanctions (as well as any penalty or sanction mitigation provisions) or to create new ones for the GloBE Information Return. New penalties and sanctions in respect of the GloBE Information Return should be commensurate with penalties or sanctions in respect of other information returns and other information return filing obligations in the jurisdiction.

29. In the case of confidentiality of the returns the information gathered under the GloBE Information Return shall have at least the same level of protection as the information obtained through domestic tax or information returns. GloBE Information Returns received by a tax administration through exchange of information would further be subject to the confidentiality rules of the applicable Tax Treaty, tax information exchange agreement or other international agreement for the exchange of information.