OECD detailed technical guidance on 15% global minimum tax as part of Pillar Two

On 14 March 2022, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) published a Commentary with detailed guidance on the Pillar Two model rules for a 15% global minimum tax. The adopted guidelines further develop the implementation and operation of the Global Anti-Base Erosion Model Rules (GloBE). GloBE aim to provide a coordinated system to ensure that multinational enterprises (MNEs) with revenues in excess of EURO 750 million pay tax of at least 15% on income earned in each of the jurisdictions in which they operate.

The published Commentary provides detailed and comprehensive technical guidance on the operation of the GloBE and the expected results of implementation, as well as interprets and clarifies certain terms. Another part of the supplemental guidance content is the presentation of various factual situations and the application of the rules to the relevant factual background. In this way, the Commentary aims to provide a consistent interpretation of the GloBE, thereby facilitating coordinated outcomes for both tax administrations and MNEs.

An Implementation Framework will be developed to assist tax authorities in the implementation and administration of the rules included in Pillar Two.