BTAX OnPoint: Safe Harbors Under Pillar Two GloBE Rules

The OECD created two additional safe harbors as part of its ongoing work on the Pillar Two GloBE rules. The two new safe harbors include:

• A permanent Qualified Domestic Minimum Top-up Tax (QDMTT) safe harbor for jurisdictions that introduce QDMTT; and
• A transitional Under Taxed Profits Rule (UTPR) safe harbor to provide Ultimate Parent Entity Jurisdictions with relief from any UTPR top-up tax for fiscal years commencing on or before the end of 2025.

The new safe harbors were included in Administrative Guidance released July 17, 2023, and follow an earlier set of Safe Harbors and Penalty Relief established December ...