On March 14, 2022, the OECD released Commentary to the Global Anti-Base Erosion (GloBE) (Pillar 2) Model Rules. Furthermore also a set of illustrative examples regarding the application of the Model GloBE Rules to certain fact patterns was released.

As you might know on December 22, 2021 the European Commission released a Proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union.

 

Although the proposal for an EU-Directive is based on the OECD GloBE Model Rules, the order of the regulations is not the same in both documents. Since the Commentary and the set of illustrative examples as released by the OECD on March 14, 2022 both refer to the article numbers as used in the OECD Model Rules and I prefer to work with the proposed EU Directive, I made a correlation table for myself. The table is meant to more efficiently find the comments/examples that relate to a certain article/paragraph of the proposed EU Pillar 2 Directive.

 

In this correlation table I made an overview of what article in the OECD Model Rules corresponds with which article/paragraph in the proposed EU Pillar 2 Directive.  Since I thought this correlation might also come in handy for other tax specialists, I decided to publish the table on our website.

 

Where you see no corresponding article in the column OECD GloBE Model Rules, either no corresponding article exists (for example because the Model Rules do not contain regulations applyin to large-scale domestic groups) or I have not yet foundnd the corresponding article in the OECD Model Rules.

 

 

Article/Paragraph in the proposed Pillar 2 Directive

Corresponding Article in the OECD GloBE Model Rules

 

Chapter I - General Provisions

   

Article 1 - Subject-matter

 

 

   

Article 2 - Scope

Paragraph 1

Article 1.1.1.

Paragraph 2

Article 1.1.2.

Paragraph 3

- Article 1.1.3.
- Article 1.5.1.
- Article 1.5.2. &
- Article 1.5.3.

   

Article 3 - Definitions

Sub 1 (Entity)

Article 10.1.1.

Sub 2 (Constituent entity)

Article 1.3.1.

Sub 3 (Group)

- Article 1.2.2. &
- Article 1.2.3.

Sub 4 (MNE group)

Article 1.2.1.

Sub 5 (Large-scale domestic group)

OECD Model Tax rules do not apply to pure domestig groups

Sub 6 (Consolidated financial statements)

Article 10.1.1.

Sub 7 (Fiscal year)

Article 10.1.1.

Sub 8 (Filing constituent entity)

Article 10.1.1.

Sub 9 (Flow-through entity)

- Article 10.2.1. &
- Article 10.2.2.

Sub 10 (Permanent establishment)

Article 10.1.1.

Sub 11 (Ultimate parent entity)

Article 1.4.1.

Sub 12 (Minimum tax rate)

Article 10.1.1.

Sub 13 (Top-up tax)

Article 10.1.1.

Sub 14 (Controlled foreign company tax regime)

Article 10.1.1.

Sub 15 (Qualified income inclusion rule)

Article 10.1.1.

Sub 16 (Low-taxed constituent entity)

Article 10.1.1.

Sub 17 (Intermediate parent entity)

Article 10.1.1.

Sub 18 (Controlling interest)

Article 10.1.1.

Sub 19 (Partially-owned parent entity)

Article 10.1.1.

Sub 20 (Ownership interest)

Article 10.1.1.

Sub 21 (Parent entity)

Article 10.1.1.

Sub 22 (Acceptable financial accounting standard)

Article 10.1.1.

Sub 23 (Qualified domestic top-up tax)

Article 10.1.1.

Sub 24 (Investment entity)

Article 10.1.1.

Sub 25 (Investment fund)

Article 10.1.1.

Sub 26 (Real estate investment vehicle)

Article 10.1.1.

Sub 27 (Pension fund)

Article 10.1.1.

Sub 28 (Pension services entity)

Article 10.1.1.

Sub 29 (Low-tax jurisdiction)

Article 10.1.1.

Sub 30 (Qualifying income or loss)

Article 3.1.1.

Sub 31 (Disqualified refundable imputation tax)

Article 10.1.1.

Sub 32 (Qualified refundable tax credit)

Article 10.1.1.

Sub 33 (Main entity)

Article 10.1.1.

Sub 34 (Tax transparent entity)

- Article 10.2.1 &
- Article 10.2.4

Sub 35 (Constituent entity-owner)

Article 10.1.1.

Sub 36 (Eligible distribution tax system)

Article 10.1.1.

Sub 37 (Qualified undertaxed payment rule)

Article 10.1.1.

Sub 38 (Designated filing entity)

Article 10.1.1.

   

Article 4 -  Location of a constituent entity

Paragraph 1

Article 10.3.1.

Paragraph 2

Article 10.3.2

Paragraph 3

Article 10.3.3.

Paragraph 4

Article 10.3.4.

Paragraph 5

Article 10.3.4.

Paragraph 6

Article 10.3.5.

Paragraph 7

Article 10.3.6.

 

 

 

Chapter II - Application of the Income Inclusion Rule and the Under Taxed Payments Rule

 

Article 5 - Ultimate parent entity in the Union

Paragraph 1

Article 2.1.1.

Paragraph 2

 

   

Article 6 - Intermediate parent entity in the Union

Paragraph 1

Article 2.1.2.

Paragraph 2

 

Paragraph 3

Article 2.1.3.

   

Article 7 - Partially-owned parent entity in the Union

Paragraph 1

Article 2.1.4.

Paragraph 2

 

Paragraph 3

Article 2.1.5.

   

Article 8 - Allocation of the top-up tax under the income inclusion rule

Paragraph 1

Article 2.1.1.

Paragraph 2

Article 2.2.2.

Paragraph 3

 

   

Article 9 - Income inclusion rule offset mechanism

Paragraph 1

- Article 2.3.1 &
- Article 2.3.2.

Paragraph 2

- Article 2.3.1 &
- Article 2.3.2.

   

Article 10 - Election to apply a qualified domestic top-up tax

Paragraph 1

 

Paragraph 2

 

Paragraph 3

 

Paragraph 4

 

   

Article 11 - Application of a UTPR across the MNE group

 

Article 2.4.1.

   

Article 12 - Application of a UTPR in the UPE jurisdiction

 

 

   

Article 13 - Computation and allocation of the UTPR top-up tax amount

Paragraph 1

Article 2.6.1. first sentence

Paragraph 2

Article 2.5.1.

Paragraph 3

Article 2.5.2.

Paragraph 4

Article 2.5.3.

Paragraph 5

Article 2.6.1.

Paragraph 6

- Article 10.1.1. (def.: Number of Employees) &
- Article 10.1.1.
(def.: Tangible Assets)

Paragraph 7

Article 2.6.2.

Paragraph 8

Article 2.6.3.

 

 

 

Chapter III - Calculation of the Qualifying Income or Loss

 

Article 14 - Determination of the qualifying income or loss

Paragraph 1

- Article 3.1.1. &
- Article 3.1.2.

Paragraph 2

- Article 3.1.3. &
- Article 10.1.1. for definitions of Authorised
  Financial Accounting Standard and Authorised
  Accounting Body

Paragraph 3

 

   

Article 15 - Adjustments to determine the qualifying income or loss

Paragraph 1

Article 10.1.1. (definitions)

Paragraph 2

Article 3.2.1.

Paragraph 3

Article 3.2.2.

Paragraph 4

Article 3.2.3.

Paragraph 5

Article 3.2.4.

Paragraph 6

Article 3.2.5.

Paragraph 7

- Article 3.2.6 &
- Article 10.1.1. (def. Look-back Period)

Paragraph 8

Article 3.2.7.

Paragraph 9

Article 3.2.8.

Paragraph 10

Article 3.2.9.

Paragraph 11

Article 3.2.10.

   

Article 16 - International shipping income exclusion

Paragraph 1

- Article 3.3.2. &
- Article 3.3.3.

Paragraph 2

- Article 3.3.1. &
- Article 3.3.6.

Paragraph 3

- Article 3.3.1. &
- Article 3.3.6.

Paragraph 4

Article 3.3.4.

Paragraph 5

Article 3.3.5.

Paragraph 6

Article 3.3.5.

   

Article 17 - Allocation of the qualifying income or loss between a main entity and a permanent establishment

Paragraph 1

Article 3.4.1.

Paragraph 2

Article 3.4.2.

Paragraph 3

Article 3.4.3.

Paragraph 4

Article 3.4.4.

Paragraph 5

Article 3.4.5.

   

Article 18 - Allocation and computation of the qualifying income or loss of a flow-through entity

Paragraph 1

- Article 3.5.3. &
- Article 3.5.4.

Paragraph 2

Article 3.5.5.

Paragraph 3

Article 3.5.1. sub a

Paragraph 4

Article 3.5.1. sub b

Paragraph 5

Article 3.5.1. sub c

Paragraph 6

Article 3.5.2.

 

 

 

 

 

 

 

 

Chapter IV - Computation of Adjusted Covered Taxes

 

Article 19 - Covered taxes

Paragraph 1

Aricle 4.2.1.

Paragraph 2

Article 4.2.2.

Paragraph 3

 

   

Article 20 - Adjusted covered taxes

Paragraph 1

Àrticle 4.1.1.

Paragraph 2

Article 4.1.2.

Paragraph 3

Article 4.1.3.

Paragraph 4

Article 4.1.4.

Paragraph 5

Article 4.1.5.

   

Article 21 - Total deferred tax adjustment amount

Paragraph 1, sub a

Article 4.4.6.

Paragraph 1, sub b

Article 4.4.7.

Paragraph 2

Article 4.4.1. opening sentence

Paragraph 3

Article 4.4.2.

Paragraph 4

Article.4.4.2

Paragraph 5

Article 4.4.1.

Paragraph 6

Article 4.4.3.

Paragraph 7

Article 4.4.4.

Paragraph 8

- Article 4.4.4. last part &
- Article 4.4.5.

   

Article 22 - Qualifying loss election

Paragraph 1

- Article 4.5.1. &
- Article 4.5.5. laste sentence

Paragraph 2

Article 4.5.3.

Paragraph 3

Article 4.5.2.

Paragraph 4

Article 4.5.4.

Paragraph 5

Article 4.5.5. first sentence

Paragraph 6

Article 4.5.6.

   

Article 23 - Specific allocation of covered taxes incurred by certain types of constituent entities

Paragraph 1

Article 4.3.2. sub a

Paragraph 2

Article 4.3.2. sub b

Paragraph 3

Article 4.3.2. sub c

Paragraph 4

- Article 4.3.2. sub d &
- Article 10.2.5. def.
Hybrid entity

Paragraph 5

Article 4.3.2. sub e

Paragraph 6

- Article 4.3.3. &
- Article 10.1.1. def. Passive income

Paragraph 7

Article 4.3.4

   

Article 24 - Post-filing adjustments and tax rate changes

Paragraph 1

Article 4.6.1.

Paragraph 2

Article 4.6.2.

Paragraph 3

Article 4.6.3.

Paragraph 4

Article 4.6.4.

 

 

 

Chapter V - Calculation of the Effective Tax Rate and the Top-Up Tax

 

Article 25 - Determination of the effective tax rate

Paragraph 1

Article 5.1.1.

Paragraph 2

Article 5.1.2.

Paragraph 3

Article 5.1.3.

Paragraph 4

Article 5.1.1. last sentence

   

Article 26 - Computation of the top-up tax

Paragraph 1

 

Paragraph 2

Article 5.2.1.

Paragraph 3

Article 5.2.3.

Paragraph 4

Article 5.2.2.

Paragraph 5

Article 5.2.4.

Paragraph 6

Aticle 5.2.5.

Paragraph 7

Article 5.1.1. last sentence

   

Article 27 - Substance-based income exclusion

Paragraph 1

Article 10.1.1. for definitions

Paragraph 2

- Article 5.3.1. &
- Article 5.3.2.

Paragraph 3

Article 5.3.3.

Paragraph 4

Article 5.3.4.

Paragraph 5

Article 5.3.5.

Paragraph 6

Article 5.3.6.

Paragraph 7

Article 5.3.7.

Paragraph 8

Article 5.1.1. last sentence

Paragraph 9

Article 5.3.2.

   

Article 28 - Additional top-up tax

Paragraph 1

Article 5.4.1.

Paragraph 2

Article 5.4.2.

Paragraph 3

Article 5.4.3.

Paragraph 4

Article 5.4.4.

   

Article 29 - De minimis exclusion

Paragraph 1

Article 5.5.1.

Paragraph 2

Article 5.5.2.

Paragraph 3

Article 5.5.3. sub a

Paragraph 4

Article 5.5.3. sub b

Paragraph 5

Article 5.5.4.

   

Article 30 - Minority-owned constituent entities

Paragraph 1

Article 10.1.1. for definitions

Paragraph 2

Article 5.6.1.

Paragraph 3

Article 5.6.2.

Final sentence

Article 5.6.2. Last sentence

   

Article 31 - Application of the consolidated revenue threshold to group mergers and demergers

Paragraph 1, sub a

Article 6.1.2.

Paragraph 1, sub b

Article 6.1.3.

Paragraph 2

Article 6.1.1. sub a

Paragraph 3

Article 6.1.1. sub b

Paragraph 4

Article 6.1.1. sub c

 

 

 

Chapter VI - Special Rules for Mergers and Acquisitions

 

Article 32 - Constituent entities joining and leaving an MNE group

Paragraph 1

Article 6.2.1. sub a

Paragraph 2

Article 6.2.1. sub b

Paragraph 3

Article 6.2.1. sub c

Paragraph 4

Article 6.2.1. sub d

Paragraph 5

Article 6.2.1. sub e

Paragraph 6

Article 6.2.1. sub f

Paragraph 7

Article 6.2.1. sub g

Paragraph 8

Article 6.2.1. sub h

Paragraph 9

Article 6.2.2.

   

Article 33 - Transfer of assets and liabilities

Paragraph 1

Article 10.1.1 (Definitions)

Paragraph 2

Article 6.3.1.

Paragraph 3

Article 6.3.2.

Paragraph 4

Article 6.3.3.

Paragraph 5

Article 6.3.4.

   

Article 34 - Joint ventures

Paragraph 1

Article 10.1.1. (Definitions)

Paragraph 2

Article 6.4.1. sub b

Paragraph 3

Article 6.4.1. sub a

Paragraph 4

Article 6.4.1. sub c

   

Article 35 - Multi-parented MNE groups

Paragraph 1

Article 10.1.1.

Paragraph 2

- Article 6.5.1. sub a &
- Article 6.5.1. sub b

Paragraph 3

Article 6.5.1. sub c

Paragraph 4

Article 6.5.1. sub d

Paragraph 5

Article 6.5.1. sub e

Paragraph 6

Article 6.5.1. sub f

Paragraph 7

Article 6.5.1. sub g

 

 

Chapter VII - Tax Neutrality and Distribution Regimes

 

Article 36 - Ultimate parent entity that is a flow-through entity

Paragraph 1

Article 7.1.1. sub a

Paragraph 2

- Article 7.1.1. sub b &
- Article 7.1.1. sub c

Paragraph 3

Article 7.1.2.

Paragraph 4

Article 7.1.3.

Paragraph 5

Article 7.1.4.

   

Article 37 - Ultimate parent entity subject to a deductible dividend regime

Paragraph 1

Article 10.1.1. (Definitions)

Paragraph 2

Article 7.2.1. sub a, (i) & (ii)

Paragraph 3, sub a

Article 7.2.1. sub a, (iii)

Paragraph 3, sub b

Article 7.2.1. sub b

Paragraph 3, sub c

Article 7.2.1. sub c

Paragraph 4

Article 7.2.2.

Paragraph 5

Article 7.2.3.

Paragraph 6

Article 7.2.4.

   

Article 38 - Eligible distribution tax systems

Paragraph 1

Article 7.3.1.

Paragraph 2

Article 7.3.2.

Paragraph 3

- Article 7.3.3. Opening sentence &
- Article 7.3.3. sub (a) &
- Article 7.3.3. sub (b)

Paragraph 4

- Article 7.3.3. sub (c) &
- Article 7.3.4.

Paragraph 5

Article 7.3.5.

Paragraph 6

Article 7.3.6.

Paragraph 7

- Article 7.3.7. &
- Article 7.3.8.

   

Article 39 - Determination of the effective tax rate and top-up tax of an investment entity

Paragraph 1

- Article 7.4.1. &
- Article 7.4.2. first sentence

Paragraph 2

Article 7.4.2.

Paragraph 3

Article 7.4.3.

Paragraph 4

Article 7.4.5.

Paragraph 5

Aticle 7.4.6.

Paragraph 6

Article 7.4.4.

   

Article 40 - Election to treat an investment entity as a tax transparent entity

Paragraph 1

Article 10.1.1. (Definitions)

Paragraph 2

Article 7.5.1.

Paragraph 3

Article 7.5.1.

Paragraph 4

Article 7.5.2.

   

Article 41 - Election to apply a taxable distribution method

Paragraph 1

Article 7.6.1.

Paragraph 2

Article 7.6.2.

Paragraph 3

- Article 7.6.3. &
- Article 7.6.4.

Paragraph 4

Article 7.6.5. sub (c)

Paragraph 5

Article 7.6.6.

 

 

 

Chapter VIII - Administrative Provisions

 

Article 42 - Filing obligations

Paragraph 1

Article 10.1.1. (Definitions)

Paragraph 2

Article 8.1.1.

Paragraph 3

Article 8.1.2.

Paragraph 4

Article 8.1.3.

Paragraph 5

Article 8.1.4.

Paragraph 6

 

Paragraph 7

Article 8.1.6.

   

Article 43 - Elections

Paragraph 1

 

Paragraph 2

 

Paragraph 3

 

   

Article 44 - Penalties

Paragraph 1

Article 8.1.8.

Paragraph 2

 

 

 

 

Chapter IX - Transitional Rules

 

Article 45 - Tax attributes upon transition

Paragraph 1

Article 10.1.1. (Definitions)

Paragraph 2

Articl 9.1.1.

Paragraph 3

Article 9.1.1.

Paragraph 4

Article 9.1.2.

Paragraph 5

Article 9.1.3.

   

Article 46 - Transitional relief for the substance-based income exclusion

Paragraph 1

Article 9.2.1.

Paragraph 2

Article 9.2.2.

   

Article 47 - Exclusion from the IIR and UTPR of MNE groups in the initial phase of their international activity

Paragraph 1

- Article 9.3.1. &
- Article 9.3.4.

Paragraph 2

 

Paragraph 3

- Article 9.3.2. &
- Article 9.3.3.

Paragraph 4

Article 9.3.4.

Paragraph 5

 

   

Article 48 - Transitional relief for filing obligations

 

Article 9.4.1.

 

 

 

Chapter X - Specific application of the IIR to large-scale domestic groups

 

Article 49 - Large-scale domestic groups

 

 

   

Article 50 - Transitional rules

Paragraph 1

 

Paragraph 2

 

 

 

 

Chapter XI - Final Provisions

 

Article 51 - Assessment of equivalence

Paragraph 1

 

Paragraph 2

 

Paragraph 3

 

   

Article 52 - Exercise of the delegation

Paragraph 1

 

Paragraph 2

 

Paragraph 3

 

Paragraph 4

 

Paragraph 5

 

   

Article 53 - Informing the European Parliament

 

 

   

Article 54 - Bilateral agreement on simplified reporting obligations

 

Article 8.1.7.

   

Article 55 - Transposition

 

 

   

Article 56 - Entry into force

 

 

   

Article 57 - Addressees

 

 

 

 

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