The tax imposed under the GloBE Rules is a “top-up tax” calculated and applied at a jurisdictional level. The GloBE rules use a standardized base and definition of covered taxes to identify those jurisdictions where an MNE is subject to an effective tax rate below 15%. It then imposes a coordinated tax charge that brings the MNE’s effective tax rate on that income up to the minimum rate (after taking into account a substance-based carve-out).
Pillar Two Top-Up Tax Excel Sample Calculation
We have prepared a sample (excel) calculation based on our understanding of the Pillar Two Model, also referred to as GloBE Rules. The calculation covers the core flow of the Top-Up Tax Calculation.
Download below the free Pillar Two Sample Calculation:
Global Anti-Base Erosion Model Rules (Pillar Two)
Top-Up Tax Sample Calculation for one single constituent entity (CE)
The calculation includes the:
- Determination of GloBE Income (or Loss)
- Adjusted Covered Taxes
- Calculation of the GloBE Effective Tax Rate
- Top-Up Tax Rate; and
- Top-Up Tax Amount
Our sample does not deal with general thresholds, allocations, exclusions, elections, transitional rules, GloBE loss carry forward, Top-Up tax credits, etc. The article numbers refer to the articles of the GloBE Rules. Click here to watch our Pillar Two Webinar where we explain the background and rationale of the various components of the calculation.
Click here to register for our upcoming Pillar 2 webinar : How to implement Pillar Two as per OECD?
Pillar 2 software early registration program
Be prepared for the new OECD / EU GloBE regulations with early access to TaxModel’s Pillar Two Software Module with :
- Automated calculations of GloBE income/losses, covered taxes and GloBE Effective Tax Rate
- Standardized group GloBE Information Return
- GloBE Top-up Tax at the constituent entity, jurisdictional, and consolidation level
- Seamless integration with existing tax environment & ERP systems
