The global minimum tax roadmap: the fog begins to lift - Tax and Legal blog


In July 2021, the G7 and the G20 fuelled the OECD Inclusive Framework with the consensus on the introduction of a global minimum tax of 15%. The high pace of policy leads at the OECD continued well into 2022 with the GloBE Framework (Pillar I & II) published in October 2021, the GloBE Rules (Pillar II) in December 2021 and the extensive commentary providing further guidance (March 2022). While the initial momentum provided for ambitious implementation plans, different global crises and the complexity of the implementation work required have slightly stalled progress. However, recent developments have revitalised the domestic efforts to introduce GloBE Rules and various jurisdictions have published their plans recently – among others: Switzerland.

Overview on GloBE Rules

Following the conclusion of the BEPS-Project, the members of the OECD Inclusive Framework released two blueprints addressing tax challenges in relation to the digital economy. The OECD, in 2021, introduced the roadmap to Pillar I and Pillar II. While publication of the final Pillar I rules remains pending, the Pillar II rules have been published in December 2021 (the “GloBE Rules”). A more comprehensive commentary by the OECD to support the interpretation of the GloBE Rules was published in March 2022 (the “GloBE Commentary”), with further clarification to be made available as part of the GloBE Implementation Framework (expected to be published by the end of 2022).

The implementation of the GloBE Rules is structured as a common approach with a “desired” set of rules to be introduced by the individual members of the Inclusive Framework. Pillar II requires jurisdictions to establish a minimum floor of taxation of 15% with regard to multinational groups (“MNE Group”) in every jurisdiction the MNE Group operates. In essence, the ruleset introduces an additional layer of taxation (including establishment of a harmonized tax base and determination of the applicable tax and tools of taxation) for every jurisdiction the MNE Group operates in.

The “tools” to enforce a global minimum taxation

In order to enforce the global minimum tax, the OECD originally planned for members of the Inclusive Framework to make use of their taxation rights and introduce the new toolsets into domestic law as follows:

  1. Qualified Domestic Top-Up Tax (“QDT”): the jurisdiction of residence maintains priority to levy a domestic top-up tax to ensure that a MNE Group does have an overall tax burden of 15%;
  2. Income Inclusion Rule (“IIR”): the GloBE Rules provide for a priority to collect the Top-Up Tax to the jurisdiction of residence of the ultimate parent entity; and in second degree to jurisdictions of intermediary holding companies;

  3. Undertaxed Profit Rule (“UTPR”): a remainder of Top-Up Taxes, is allocated to jurisdictions that have incorporated undertaxed profit rules in line with the GloBE Rules;

  4. Subject to Tax Rule (“STTR”): while outside of the general GloBE Rules, the STTR provides a redesign framework of the OECD model convention to allocate taxation rights between jurisdictions.

The OECD - Roadmap…

While QDT (targeting domestic income only ) may be introduced at the discretion of every jurisdiction within their own sovereign right to tax its residents (independent of GloBE Rules), the IIR and the UTPR provide for a cross border aspect with some interference with the sovereign taxation rights of a third jurisdiction. Hence, the common approach agreed by members of the Inclusive Framework provided for the right to implement IIR as of 1 January 2023 and UTPR as of 1 January 2024.

…and where we stand

Significant coordination and alignment required between members of the Inclusive Framework and a shift in priorities following the war in Ukraine provided for an acknowledgment of the OECD, that meeting the initial roadmap may be difficult, if not impossible, since the tools still need to be translated into domestic legislation by various jurisdictions and further refined by the OECD itself. As of 15 August 2022, the status is the following:


Following the publication of the GloBE Commentary in March, the OECD held a public consultation on the GloBE Implementation Framework addressing a number of uncertain key elements. The public consultation indicates that the GloBE Implementation Framework will address, among others:
- further refinement of the application of the rules
- clear guidance on data requirements / data formats
- templates for GloBE Information Returns
- certain safe harbours
- refined guidance on transition into GloBE
- dispute resolution mechanism

In addition to the GloBE Implementation Framework, it is expected that further refinement of the GloBE Commentary and more detailed guidance on the interpretation of the rules is to follow.

European Union:

The EU-Directive to translate GloBE Rules into European law and require member states to implement the GloBE Rules in their domestic legislation was originally published in December 2021 and further refined in March 2022 and June 2022 to accommodate for the requirement of a delayed implementation into domestic law of member states by 2024 only (with the UTPR to apply as of 2025). While Poland initially opposed the project, Hungary is currently blocking further progression of the proposal, however the current Czech presidency targets final approval of the EU-Directive by October 2022.

The EU-Directive is broadly aligned with the GloBE Rules but requires member states to apply the rules to domestic only MNE’s as well. In addition, the member states may further delay implementation of UTPR beyond the 2025 deadline under certain requirements.


The Swiss Federal Government introduced initial legislation to amend the constitution in March 2022 for public consultation and published its roadmap to introduce a QDT, IIR and UTRP into domestic legislation applicable as of 1 January 2024 in June 2022. To introduce a corresponding legislation, the Swiss constitution would need to be amended with a popular vote scheduled for 2023. QDT and IIR rules are planned to apply from 1 January 2024 onwards with no clear indication on the timing of the implementation of UTPR yet.

For the time being, the Swiss implementation is to be based on an self-executory ordinance paraphrased in the constitution for a transition period and detailed implementation into domestic federal law is to follow only after some time and global practice in application of the GloBE Rules are known to the legislator. The draft ordinance published in August 2022 (by reference to the GloBE Rules published by the OECD and requirement to follow the commentary and Agreed Framework) emphasizes the current plan and draft legal basis published by the Swiss federal government: Swiss GloBE Rules shall be closely aligned with the GloBE Rules.

United States:

With GILTI, the United States already has a system in place similar to an IIR but lacking the jurisdictional blending required by the GloBE Rules. While changes to GILTI required for conformity with the GloBE Rules are part of the stalled “Build Back Better Act”, the congress recently passed the introduction of the “Alternative Minimum Tax” requiring a 15% minimum tax of US corporations with revenues of USD 1bn and more.

The minimum rate of 15% is the only conformity to GloBE Rules and US MNE Groups may – regardless of the alternative minimum tax – be subject to QDT / IIR or UTRP in respective jurisdictions.

While the treatment of GILTI (and proposed adjustments) under GloBE Rules is being discussed at the OECD level, some jurisdictions consider a simplified treatment of GILTI-Taxes / Subpart F taxation under the reallocation of CFC-Taxation required by the GloBE Rules.

United Kingdom:

The UK government introduced a draft law into public consultation already in April 2022. Subsequent draft legislation for the introduction of IIR rules as of 1 January 2024 have been published in July 2022 with no clear statement whether QDT and UTPR will be introduced. However, based on the consultation, there is a widespread understanding that the UK government has the intention to introduce both QDT and UTPR rules as well.

According to statements by the UK government, the government would consider the UK Digital Services Tax not to qualify as a Covered Tax, but the UK diverted profits tax and other CFC taxes (incl. US excise taxes) to qualify as Covered Taxes requiring a “reallocation”

South Korea:

One of the first Asian countries to publish draft legislation with regard to the GloBE Rules, the South Korean draft law, published in July 2022 introduces both IIR and UTPR rules to take effect as of 1 January 2024.

While the current draft does not provide for a QDT being implemented in South Korea, final legislation to be published towards the end of 2022 may provide for further guidance in this regard.


While the majority of jurisdictions await the EU progression, plans to introduce GloBE Rules or legislation to comply with GloBE Rules are available in other jurisdictions as well:

Canada, Australia and New Zealand have recently issued statements or draft legislation into consultation. While no clear guidance on timing is available it is expected that IIR / UTPR are not to be implemented prior to 1 January 2024.

Singapore and Hong Kong are expected to introduce domestic legislation to conform their domestic tax systems with GloBE Rules. While Hong Kong indicated deferral to 2024, no clear guidance on timing is available with regard to Singapore.

What we learn from the legislation(s)

The global minimum tax, while intending to be a common approach, can lead / provide for different interpretation from different jurisdictions on data and data points defined in the GloBE Rules. The minimum rate is 15% and there is broad alignment in draft legislation with the GloBE Rules on underlying data. However, explanatory statements of some governments leave room for interpretation for certain terms / topics. This indicates that the qualification or treatment may differ between jurisdictions (unless safe harbour / guidelines are published by the OECD). One example: certain taxes may qualify as Covered Tax in one jurisdiction but not in another jurisdiction [i.e. reallocation of GILTI] and could lead to a different top-up tax profiles of the MNE Group in the two jurisdictions.

In addition GloBE Information Returns may need to be filed with the ultimate parent entities, however a majority of jurisdictions with draft legislation require notifications on filing (UK) and/or a designated filing entity in a member state (EU-Directive). These filings only cover the top-up taxes under IIR and UTPR but additional tax filings to comply with QDT rules are yet to be published in the majority of jurisdictions.

And what the future may hold?

The global minimum tax is approaching and autumn 2022 may provide for the final EU-Directive with a global wave of domestic legislation to follow. MNE Groups that fall within scope of the GloBE Rules will certainly be captured by additional compliance burdens, including (but not limited to) additional tax return filings. The additional layer of tax compliance burden is largely owed to a previously unknown harmonized tax base and potential risk for local interpretation. This results in an additional level of complexity and requires some active management.

All changes proposed rely on the availability of corporate data and its interpretation under the harmonized GloBE Rules in order to establish the global tax base. While the actual interpretation of underlying data may evolve with additional details, guidance and legislation published in the course of the year, the GloBE Rules (in their current form) sufficiently define the corporate data needed to prepare.

Is it already time to act?

Considering the widespread delayed application of the GloBE Rules to after 1 January 2024 only, MNE Groups have an additional year to prepare for these rules to apply and adopt their internal processes.

While there remains sufficient time to act and implement, MNE Groups should prepare for the impending changes with a proper data strategy and mapping of their organization under consideration of GloBE (i.e. establish an understanding of the concept of the GloBE Rules and the corporate data and data sources, that could have an impact to the MNE Group and may require further attention once more detailed legislation follows). The data strategy and proper mapping provides readiness and careful management of resources required to implement the changes once enactment looms.

If If you would like to discuss more on this topic, please do reach out to our key contacts below.

Key contacts

Blog_Daniel stutzmann110x110

Daniel Stutzmann - Partner, Global Minimum Tax  

Daniel is a Tax Partner with more than 15 years of experience as an international corporate tax specialist. This includes a one year assignment in the US to lead the Swiss ICE Desk. Daniel has extensive experience in the area of cross-border structuring (like establishing tax efficient IP- and financing structures) as well as business reorganizations including large supply chain transformation projects. This also includes advising several multinationals in moving their worldwide/regional headquarters or central functions to Switzerland, while often establishing tax privileged Swiss principal companies. In his capacity as Swiss tax expert he has worked on a significant number of value chain alignment (“VCA”) projects, cross border restructuring and headquarter relocations.


Manuel Angehrn110x110

Manuel Angehrn - Senior Manager, Global Minimum Tax  

Manuel is a Senior Manager with over 10 years of experience in International Tax. He is a Deloitte Switzerland’s Global Minimum Tax subject matter expert. He follows domestic and global tax developments and assesses the impact to Swiss multinationals.



Gautam Agarwal - Senior Manager, Accounting Advisory Services

Gautam is a Senior Manager in our Corporate Assurance Services department and brings over 10 years of experience in accounting advisory. He is Deloitte Switzerland’s Pillar II accounting technical knowledge leader. He is responsible for the accounting impact assessment and governance.


Peluso Ryan-109-110-v3

Ryan Peluso - Assistant Manager, Global Minimum Tax

Ryan is an Assistant Manager with over 7 years of experience in International Tax. He supports in modelling the impact of Pillar II as well as developing and executing processes for its implementation. He is specialised in helping clients access, visualise and analyse their data for international tax reporting, compliance and planning processes.



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