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Submission: On November 21 via api from QA — Scanned from DE
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Thumbnails Document Outline Attachments Layers Current Outline Item Untitled Previous Next Highlight All Match Case Match Diacritics Whole Words Color Size Color Thickness Opacity Presentation Mode Open Print Download Current View Go to First Page Go to Last Page Rotate Clockwise Rotate Counterclockwise Text Selection Tool Hand Tool Page Scrolling Vertical Scrolling Horizontal Scrolling Wrapped Scrolling No Spreads Odd Spreads Even Spreads Document Properties… Toggle Sidebar Find Previous Next of 8 Presentation Mode Open Print Download Current View FreeText Annotation Ink Annotation Tools Zoom Out Zoom In Automatic Zoom Actual Size Page Fit Page Width 50% 75% 100% 125% 150% 200% 300% 400% October 2023 Pillar Two Info Sheet - Adjustments to GloBE Income and Covered Taxes https://www.pwc.com/us/en/services/tax/multinationals/pillar-two-model-for-data-and-reporting.html PwC | Pillar Two Info Sheet October 2023 The GloBE rules require a Top-Up Tax on a jurisdictional basis for any Constituent Entity (CE) which fails to meet the minimum required effective tax rate (ETR) (i.e., 15%). Determining if a Top-Up Tax should be applied requires two major inputs: (1) GloBE income and (2) tax imposed on such income. Once both inputs are determined, the aggregated jurisdictional ETR can be calculated (i.e., tax divided by GloBE income, aggregated for each CE in the jurisdiction). If the aggregated ETR is less than the 15% minimum rate, a Top-Up Tax will be applied pursuant to Article 2-5 of the GloBE rules. GloBE Income or Loss is generally calculated based on separate legal entity financials using the Ultimate Parent Entity’s (UPE) financial reporting standard (e.g., US GAAP), but with numerous required or elective adjustments. For example, certain disallowed expenses are required to be reversed, and intra-group transactions may be adjusted to comply with the arm’s length standard. Below is an overview of the GloBE Income (or Loss) calculation and the required adjustments to financial statement income needed to compute such amount. 2 Background 3 Consolidated IFRS/US GAAP or equivalent financial statements Deconsolidate financial statements for each Constituent Entity Push down consolidation adjustments (excluding Purchase Price Adjustments) Elect to aggregate or consolidate on a jurisdictional basis Process adjustments to calculate GloBE Income and Covered Taxes Calculate ETR [Covered Tax/GloBE Income] If ETR is below the minimum rate of 15% Adjust GloBE Income for Substance carve outs Calculate jurisdictional Top-up Tax Identify Constituent Entities and their locations File GloBE return in UPE jurisdiction (15 months after end of period, 18 months first year) Monitor post submission for timing differences and refile Basic Overview - Illustrative Process for GloBE Calculation PwPwCC || PilPillalarr TTwwoo Info Sheet October 2023 More Information Less Information Close Enter the password to open this PDF file. Cancel OK File name: - File size: - Title: - Author: - Subject: - Keywords: - Creation Date: - Modification Date: - Creator: - PDF Producer: - PDF Version: - Page Count: - Page Size: - Fast Web View: - Close Preparing document for printing… 0% Cancel This site uses cookies to provide a personalized content experience and track visitor engagement. Learn More AcceptDecline Next Next Pillar Two Entity Classification Flowcharts This document includes flowcharts to help provide a roadmap as to what entities qualify as a Constituent Entity (CE) for purposes of applying the GloBE rules, including Minority-Owned CEs, Partially-Owned CEs, and JVs. The flowcharts also provide a roadmap to the types of Flow-Though Entities and Hybrid Entities. pdf:Differences between the Transitional CbCR Safe Harbor and Pillar Two pdf:Pillar Two Elections pdf:Info Sheet - Adjustments to GloBE Income and Covered Taxes pdf:Pillar Two Entity Classification Flowcharts