OECD publishes tax guidance on global minimum tax

The OECD has published further administrative guidance on the global minimum tax rules under Pillar Two, including two new safe harbors.

The guidance relates to the OECD’s ongoing work under Pillar Two of the two-pillar solution to address digital economy taxation.

Detailed administrative guidance has been published on currency conversion rules, the substance based income exclusion, and further guidance on the treatment of tax credits.  

The two new safe harbours included in the package are a permanent safe harbour for jurisdictions that introduce a Qualified Domestic Minimum Top-up Tax (QDMTT), and a transitional UTPR Safe Harbour, which provides the UPE Jurisdiction with relief from the application of the UTPR for fiscal years commencing on or before the end of 2025.

The package includes a GloBE Information Return, which includes simplified reporting requirements and that will form part of a centralized filing and exchange framework.