20 May 2026 OECD releases common understanding on GIR central filing and updates to Administrative Guidance under Pillar Two
On 18 May 2026, the Organisation for Economic Co-operation and Development (OECD) published a document that addresses practical compliance and coordination challenges arising in connection with the first filings under the Global Minimum Tax under Pillar Two, as well as updates to the Pillar Two Administrative Guidance.
As part of the administrative framework supporting the GloBE Model Rules, MNE Groups are required to prepare and file a standardized GIR, which provides tax authorities with the information necessary to assess the application of the rules on a jurisdictional basis. To reduce compliance burdens, the GloBE Model Rules include a central filing mechanism, whereby the GIR may be submitted in a single jurisdiction and will be automatically exchanged with other relevant jurisdictions under a Qualifying Competent Authority Agreement (QCAA). Since the release of the GloBE Model Rules, the OECD has issued a series of Administrative Guidance packages, updates to the GIR template and filing framework, and additional materials to support the consistent implementation and administration of the rules. In particular, the OECD released updated GIR-related guidance and the Multilateral Competent Authority Agreement for the exchange of GloBE Information (GIR MCAA),1 as well as the Central Record of Legislation with Transitional Qualified Status,2 which tracks jurisdictions with domestic legislation implementing the Global Minimum Tax that meets the requirements for qualification during the transitional period. In addition, in recognition of the practical challenges associated with the initial implementation of the rules, the OECD introduced several transitional relief measures, including the Transitional UTPR Safe Harbour. This safe harbor provides that, subject to certain conditions, the UTPR Top-up Tax in the Ultimate Parent Entity (UPE) jurisdiction is deemed to be zero during a limited transition period. Under the GloBE Rules, MNE Groups are required to file a GIR with each implementing jurisdiction in which they operate, unless the GIR is submitted centrally in a jurisdiction that can exchange the information with other relevant jurisdictions under a QCAA. The GIR must be filed within 15 months after the end of the Fiscal Year; however, for the first year, an extended deadline of 18 months after the end of the Fiscal Year applies (e.g., for calendar-year groups, the GIR for the Reporting Fiscal Year 2024 should be filed by June 30, 2026). Under the central filing and exchange framework, the jurisdiction in which the GIR for the first Reporting Fiscal Year is filed should exchange the relevant information with other implementing jurisdictions within six months after the filing deadline in accordance with the GIR MCAA. The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) acknowledges that, for the initial year of application, certain practical challenges may arise. In particular, some jurisdictions may not have fully operational GIR filing systems in place by the filing deadline, and exchange relationships under the GIR MCAA may not yet be activated or finalized at that time. Accordingly, jurisdictions that have implemented the Global Minimum Tax effective from 2024 have agreed on a coordinated approach. Specifically, jurisdictions that have joined the common understanding have agreed to apply, to the extent available under domestic law, administrative measures to prevent adverse consequences for taxpayers, including either:
This relief would be available only if the GIR has been centrally filed in any one of the jurisdictions listed in the annex3 by the relevant filing deadline and the GIR notification has been filed in the local jurisdiction by the relevant deadline. The document also indicates that where a jurisdiction has waived penalties or not enforced local filing requirements, it may take corrective action if the GIR filed under a central filing approach has not been sent to that jurisdiction within the applicable exchange timeframe of six months. Such actions may include requiring the relevant MNE Group to comply with local filing obligations. The effect of the above is that MNE Groups that have timely filed the 2024 GIR centrally in one of the listed jurisdictions will not have adverse consequences from not filing the GIR locally in a jurisdiction that has joined the common understanding. It should be noted that four of the countries that have a Global Minimum Tax in effect for 2024 have not been able to join the common understanding as of 12 May 2026: Bahamas, North Macedonia, Slovak Republic and Vietnam, and therefore the above relief may not be available in those countries. In addition, Greece and Poland have joined the common understanding only with respect to Member States of the European Union that are included in the list in the annex. The relief only relates to the local filing obligation with respect to the GIR and does not impact the filing deadlines for the centrally filed GIR, notifications or domestic minimum tax returns. The OECD also updated the Central Record of Legislation with Transitional Qualified Status listing the jurisdictions with legislation that had completed the transitional qualification mechanism process for the Income Inclusion Rule (IIR), the Domestic Minimum Top-up Tax (DMTT) or the QDMTT Safe Harbour. The May 2026 update of the Central Record added the legislation of the following jurisdictions to the list of Qualified DMTTs: The Central Record states that it will be updated on a regular basis. In addition, it indicates that the fact that a particular jurisdiction's legislation is not included in the Central Record does not necessarily mean that the legislation is not qualified; rather, it only means that the jurisdiction has not yet initiated or completed the transitional qualification mechanism process. The OECD has released additional Administrative Guidance addressing the application of the Transitional UTPR Safe Harbour. Under the initial Administrative Guidance, the Transitional UTPR Safe Harbour applied to Fiscal Years that do not exceed 12 months and that begin on or before 31 December 2025 and end before 31 December 2026. The OECD/G20 Inclusive Framework on BEPS has identified that certain MNE Groups prepare financial statements based on accounting periods comprising full weeks (i.e., 52- or 53-week Fiscal Years) that consistently end on the same day of the week each year. As a result of this approach, an MNE Group could have a 53-week Fiscal Year that begins on or before 31 December 2025 but ends after 31 December 2026. Absent further clarification, these MNE Groups may not be eligible for the Transitional UTPR Safe Harbour with regard to that Fiscal Year, and also would not be eligible for the newly introduced SbS Safe Harbour or UPE Safe Harbour for that year, potentially resulting in the unintended loss of safe harbor protection in the UPE jurisdiction for that year. To address this, the additional Administrative Guidance extends the application of the Transitional UTPR Safe Harbour to include Fiscal Years that run no longer than 12 months that begin on or before 31 December 2025 and end on or before 3 January 2027. The agreed approach on central filing and exchange for the 2024 Reporting Fiscal Year provides a degree of administrative coordination across jurisdictions intended to mitigate duplicative reporting obligations in the initial year of application. MNE Groups that centrally file the GIR and comply with associated notification requirements may benefit from reduced exposure to local filing obligations in certain jurisdictions, subject to the conditions set out in the common understanding. The relief only relates to the local filing obligation for the GIR and does not affect the filing deadlines for the centrally filed GIR (due 30 June 2026 for calendar-year MNE Groups), notifications or domestic minimum tax returns. To be able to file centrally, an MNE Group will need to monitor whether the jurisdiction in which it intends to file will have a fully operational filing portal. If an MNE Group is not able to file in the intended central jurisdiction before the filing deadline because of technical constraints, local filing obligations may still be applicable. MNE Groups may consider (1) building in flexibility in their compliance approach, including being prepared to change from the planned central filing location or adapt to local requirements where necessary, and (2) ensuring that systems and processes are in place to support timely GIR preparation and submission. If an MNE Group wants to change the central filing jurisdiction, notifications in local jurisdictions would need to be updated. MNE Groups may be required to file the GIR locally in the jurisdictions that have not been able to adopt the common approach (Bahamas, North Macedonia, Slovak Republic and Vietnam). Furthermore, they may be required to file the GIR locally in Greece or Poland if the central filing does not take place in a Member State of the European Union that is included in the annex. MNE Groups with a 52/53-week Fiscal Year will be eligible to apply the Transitional UPE Safe Harbour for their Fiscal Year ending on or before 3 January 2027. The Central Record provides key information for determining the order in which the various elements of the Global Minimum Tax rules apply and the countries in which MNE Groups will have to report their Global Minimum Tax liability. Companies should review the Central Record's treatment of the legislation in jurisdictions relevant to their businesses and evaluate the implications for their Global Minimum Tax calculations. They also should continue to monitor future updates to the Central Record.
Document ID: 2026-1109 | ||||||||
