Pillar Two: OECD publishes safe harbour rules and opens consultation on tax compliance and certainty

On 20 December 2022, the OECD released new documents relating to the global minimum taxation rules (GloBE rules, which form part of the Pillar Two initiative). One is the long awaited “Guidance on Safe Harbours and Penalty Relief”, which notably contains an agreed temporary “CbCR Safe Harbour” for the initial three years (in most cases). Furthermore, a public consultation is launched about the GloBE Information Return and Tax Certainty for the GloBE Rules. The deadline for input is 3 February 2023.


In December 2021 the members of the OECD’s Inclusive Framework (IF) reached a political agreement on reforms to the international tax system. One of the Pillar Two measures agreed was the introduction of top-up tax rules to ensure a minimum effective taxation of 15% in each jurisdiction where MNE groups with a global turnover of at least EUR 750 million have a taxable presence (GloBE Rules). We refer to our Tax Flash of 21 December 2021. The OECD also published a commentary in March 2022, we refer to our Tax Flash of March 2022. Last week, the EU formally adopted the EU Directive implementing Pillar Two. We refer to our Tax Flash of 16 December 2022.


On 20 December 2022, the OECD released an additional implementation package relating to the GloBE Rules consisting of three parts:

  • Guidance on Safe Harbours and Penalty Relief;
  • A public consultation document on the GloBE Information Return; and
  • A public consultation document on Tax Certainty for the GloBE Rules. 

The IF expects to release administrative guidance on the GloBE rules on a rolling basis and the first package is expected in 2023. In addition, the OECD announces that it is also in the process of finalizing the subject-to-tax rule (we refer to our earlier flash on Pillar Two for the details) and the multilateral instrument required to implement it. 

Guidance on safe harbours and penalty relief

The Guidance on Safe Harbours and Penalty Relief (Guidance) includes three sections:

  • the agreed terms of a Transitional Country-by-Country Reporting Safe Harbour;
  • the framework for the development of Permanent Safe Harbour;
  • a common understanding as to a Transitional Penalty Relief Regime.

The GloBE Rules and the recently approved EU Directive already contain a placeholder for safe harbours. The agreed Transitional Country-by-Country Reporting Safe Harbour (Transitional Safe Harbour) should therefore directly be part of the formal implementation process of the GloBE Rules and EU Directive.

The IF is also working on a Qualified Domestic Minimum Top-up Tax (QDMTT) safe harbour that would eliminate the need for an MNE to perform an additional GloBE calculation in a jurisdiction that has adopted a QDMTT. This safe harbour will be part of the Administrative Guidance on the QDMTT.

  • Transitional Safe Harbour
  • Framework for the development of Permanent Safe Harbour
  • Transitional Penalty Relief Regime

Public consultation document on the globe information return

The IF has started working on a standardized GloBE Information Return (GIR) that provides information on the tax calculations made by MNE Groups and should contain all information tax administrations require to evaluate whether an MNE Group is compliant with the GloBE rules. The IF has primarily focused on the identification of the data points required for calculating an MNE’s GloBE tax liability. The data points and the explanatory guidance hereto are included in the Annex to the public consultation document.

The OECD seeks input on the amount and type of information that MNE Groups should be expected to collect, retain and/or report for the application of the GloBE Rules and possible simplifications that could be incorporated in the GIR as well as the ability of the MNE Group to provide alternative data points.

Public consultation document on tax certainty for the globe rules

The public consultation document on Tax Certainty for the GloBE Rules outlines various mechanisms for achieving tax certainty under the GloBE Rules that are being explored by the IF. The document focuses on dispute prevention mechanisms to ensure a common interpretation and / or application of the rules and dispute resolution mechanisms to resolve GloBE issues. In short, the IF summarizes how to expand the use of several already available mechanisms, such as APA's, ICAP or MAP's to the GloBE Rules. 

Next steps

The EU has formally approved the directive to implement the GloBE Rules within the EU. The “income inclusion rule” and (optionally) the “Qualified Domestic Minimum Top-up Tax” will enter into force for tax years starting on or after 31 December 2023. It is expected that other jurisdictions will follow shortly. 

MNE Groups (and domestic groups if located in the EU) should therefore start preparing now to apply the GloBE rules as of 2024. The agreed Transitional Safe Harbour provides a welcome simplification for the first years that the GloBE Rules apply. Within the EU, member states will need to legislate on the implementation of this simplification measure in addition to the directive. The public consultation document on the GIR also provides groups an opportunity to assess whether they are ready to gather all data points required to perform the GloBE calculations. 

Groups in scope of Pillar Two get thereby another opportunity to contribute to the design of the GloBE Information Return and Tax Certainty under the GloBE rules. Our Pillar Two team can support you in providing input.

Our Pillar Two team is available to support you in analysing and modelling the impact of the Pillar Two rules on your group, assisting you in setting up compliance processes and exploring ways to mitigate increased taxation and complexity.

Pierre-Antoine Klethi
Senior Associate

Aline Nunes
Senior Associate