Nova interpretace OECD k Piliri 2

New OECD interpretation of Pillar 2

The OECD is traditionally thinking of us in the run-up to Christmas and has given us a Christmas present - a new (third) Administrative Guidance (AG) on the application of the GloBE rules under Pillar 2:

Safe Harbours:

• PPA (purchase price accounting) should be reviewed in the context of CbCR safe harbours application - AG brings additional tests.
• AG clarifies application of CbCR safe harbours for joint ventures.
• AG emphasizes symmetry of source data for CbCR safe harbors (e.g., deferred tax should generally correspond to source data for income).
• The AG confirms the possibility of using different types of qualified financial statements for different jurisdictions when applying the CbCR safe harbour.
• The AG clarifies that, in general, adjustments cannot be made to the data from qualified financial statements - except for adjustments specifically required by AG for purposes of the safe harbour application.
• The AG addresses the specific situation of payments characterized as debt for accounting purposes and dividend for tax purposes in the context of the CbCR safe harbour application.
• The AG allows for the possibility of applying the CbCR safe harbours even for those groups subject to the GloBE rules that are not required to prepare a CbC report.
• The AG clarifies what numbers to base the safe harbours on for permanent establishments.
• The AG clarifies the use of increased transitional percentages for purposes of the so-called routine profits test.
• AG contains anti-abuse rules regarding so-called hybrid arbitrage arrangements.

Other:

• AG clarifies which revenues to take into account when assessing whether the EUR 750 million threshold is met.
• The AG allows a simplified procedure for non-consolidated non-material constituent entities (NMCEs).
• AG clarifies the rules for special CFC regimes.
• We can look forward to an updated version of the commentary next year.

If you have any questions, please contact the author of the article or the EY tax team with whom you regularly work.

Author:

Karel Hronek