Global Minimum Tax (OECD Pillar 2) Impact
Does OECD Pillar 2 apply to your MNE? Calculate your effective tax rate per jurisdiction, substance-based income exclusion, top-up tax under IIR/UTPR, and whether the new Side-by-Side safe harbor protects you.
MNE Scope & Structure
Jurisdictional Data
Safe Harbor Elections
MNE Scope Determination
Jurisdictional Effective Tax Rates
| Jurisdiction | GloBE Income | Covered Taxes | ETR | SBIE | Excess Profit | Top-Up % | Top-Up Tax | Mechanism |
|---|---|---|---|---|---|---|---|---|
| IE | €100,000,000 | €7,500,000 | 7.50% | €4,500,000 | €95,500,000 | 7.50 pp | €7,162,500 | QDMTT |
| SG | €80,000,000 | €13,600,000 | 17.00% | €2,850,000 | €77,150,000 | 0.00 pp | €0 | None |
| US | €520,000,000 | €105,000,000 | 20.19% | €18,750,000 | €501,250,000 | 0.00 pp | €0 | None |
| IN | €120,000,000 | €26,400,000 | 22.00% | €7,125,000 | €112,875,000 | 0.00 pp | €0 | None |
| Totals | €820,000,000 | €152,500,000 | 18.60% | €33,225,000 | SBIE savings: €337,500 | €7,162,500 | ||
Safe Harbor & Collection Detail
GloBE Information Return (GIR) Readiness
This calculator provides estimates for planning purposes. Pillar 2 calculations require detailed GloBE workpapers and professional tax advice. Always consult a qualified tax advisor before filing.
Complete Guide to OECD Pillar 2 Global Minimum Tax
A multinational with €1B in revenue operates in 15 countries. Its Irish subsidiary pays 12.5% corporate tax. Its Singapore subsidiary pays 17%. Under OECD Pillar 2, low-tax operations owe a "top-up tax" to reach the 15% global minimum. The top-up can be collected by the jurisdiction itself (QDMTT), the parent country (IIR), or other countries (UTPR). The substance-based income exclusion protects profits tied to real economic activity. The January 2026 Side-by-Side package exempts US-parented MNEs from IIR and UTPR.
The Three Collection Rules
QDMTT is preferred — the low-tax jurisdiction collects locally. 40+ countries have implemented QDMTTs as of 2026 including UK, Germany, France, Japan, South Korea, Australia. IIR applies when no QDMTT exists — the UPE country collects via an Income Inclusion Rule similar to a CFC. UTPR is the backstop — other jurisdictions deny deductions to collect the top-up. The US strongly opposed UTPR, leading to the January 2026 Side-by-Side agreement.
The Side-by-Side Revolution (January 2026)
The SbS Safe Harbor exempts US-parented MNE groups from IIR and UTPR in all jurisdictions for FY beginning on or after January 1, 2026. It does not eliminate QDMTTs — US MNEs still face top-up taxes in 40+ jurisdictions. GIR filings continue. Non-US MNEs with US subgroups remain fully subject to IIR/UTPR.
SBIE: Manufacturing's Shield
SBIE = 5% × payroll + 5% × tangible assets (10% for 2024-2025; 7.5% for 2026-2027). It favors manufacturing, logistics, and R&D operations with significant payroll and physical assets, and disfavors IP holding companies, financing entities, and digital businesses with few tangible assets.
Methodology & Data Sources
- OECD GloBE Model Rules: December 2021, as amended by Jan 2026 Side-by-Side package.
- ETR: Adjusted Covered Taxes / GloBE Income per Articles 3-5.
- Safe Harbors: Transitional CbCR (to 2027), Simplified ETR (permanent), SBTI, SbS, UPE.
- QDMTT tracking: KPMG, PwC, EY country trackers.
- Side-by-Side: US Treasury, G7 June 2025 agreement, OECD Central Record.
Common questions
- Pillar 2 applies to MNE groups with consolidated annual revenues of EUR 750 million+ in at least 2 of the last 4 fiscal years. Government entities, non-profits, pension funds, and investment funds that are UPEs are generally excluded.
- QDMTT: the low-tax jurisdiction collects the top-up itself. IIR: the UPE country taxes low-taxed foreign profits. UTPR: backstop — other jurisdictions deny deductions. Priority: QDMTT → IIR → UTPR.
- The Substance-Based Income Exclusion equals 5% of payroll + 5% of tangible assets (10% transitional for 2024-2025, 7.5% for 2026-2027). It reduces excess profit subject to top-up tax.
- Yes for IIR/UTPR but not for QDMTTs. US-parented MNEs are exempt from IIR/UTPR worldwide for FY beginning on or after Jan 1, 2026, but still owe top-up tax in QDMTT jurisdictions (40+ countries).
- Refundable credits increase GloBE income (low ETR impact). Non-refundable credits and IP boxes reduce covered taxes (high ETR impact). Expenditure/production-based incentives may be protected by the new SBTI Safe Harbor.
- Simplified compliance for FY beginning ≤ Dec 31, 2027. Three tests: de minimis (revenue < €10M, income < €1M), simplified ETR (≥15-17%), or routine profits (covered by SBIE). If any test passes, top-up tax = 0.
- GloBE ETR = Adjusted Covered Taxes / GloBE Income. GloBE Income starts with financial accounting income and applies 15+ adjustments per OECD Articles 3-5. The tool uses simplified inputs for planning.
- The standardized reporting form all in-scope MNEs must file. Due 18 months after fiscal year end. US MNEs benefiting from the SbS Safe Harbor must still file GIRs — the safe harbor only eliminates IIR/UTPR liability.