OECD holds public consultation meeting on compliance and tax certainty aspects of Pillar Two global minimum tax

  • On 16 March 2023, the Organisation for Economic Co-operation and Development (OECD) held a virtual consultation meeting on the public consultation documents on the Pillar Two Global Anti-Base Erosion (GloBE) information return and on tax certainty for the Pillar Two GloBE rules that had been released by the OECD Secretariat on 20 December 2022.

  • During the meeting, three panels discussed key questions related to the proposals on tax certainty, including why tax certainty is important for the implementation of the GloBE rules and how differences/issues in the application of the rules can be prevented or resolved, and two panels discussed key questions related to the GloBE information return, including simplification of the data points and the return and standardization of administration.

  • It is important for businesses to continue to monitor developments with respect to Pillar Two over the coming months, including the implementation of the rules by all relevant jurisdictions.

Executive summary

On 16 March 2023, the OECD held a virtual consultation meeting on the public consultation documents that had been released by the OECD Secretariat on 20 December 2022 on the Pillar Two GloBE information return1 and on tax certainty for the Pillar Two GloBE rules2 in connection with the ongoing OECD/G20 project on Addressing the Tax Challenges Arising from the Digitalisation of the Economy (the so-called BEPS 2.0 project).

During the consultation meeting, three panels of business representatives and an academic discussed tax certainty and two panels of business representatives discussed the GloBE information return. The panels on tax certainty focused on why tax certainty is important for the implementation of the GloBE rules and how differences/issues in the application of the rules can be prevented or resolved. The panels on the GloBE information return focused on simplification of the data points and the return as well as standardization of administration.

Detailed discussion


The OECD released the GloBE Model Rules on 20 December 2021and the accompanying Commentary on 14 March 2022,4 as approved by the Inclusive Framework on Base Erosion and Profit Shifting (BEPS). As part of the implementation package for these Pillar Two rules, the OECD released two public consultation documents on 20 December 2022:

  • consultation document (pdf) on tax certainty for the GloBE rules that includes options for dispute prevention mechanisms and dispute resolution mechanisms.

  • consultation document (pdf) on the GloBE information return that provides specifics on the development of a standardized GloBE information return.

The deadline for submission of written comments to both consultation documents was 3 February 2023. More than 85 comment submissions were received from businesses, industry associations, tax advisors and individuals on each of the consultation documents. EY submitted a global comment letter (pdf) to the OECD on tax certainty for the GloBE rules. EY also submitted a global comment letter (pdf) on the GloBE information return.

The public consultation meeting

On 16 March 2023, the OECD hosted a virtual consultation meeting to discuss the comments submitted on these two public consultation documents. Members of the OECD Secretariat participated in the meeting and there were panel discussions on each of the consultation documents:

Item 1: Tax Certainty

-  Overview of comments received

-  Panel One: Providing tax certainty - Why is tax certainty important for the implementation of the GloBE Rules?

-  Panel Two: Dispute prevention - How can we prevent differences/issues in the application of the rules?

-  Panel Three: Dispute resolution - How can we resolve potential differences/issues?

Item 2: GloBE Information Return

-  Overview of comments received

-  Panel One: Simplification of data points and return

-  Panel Two: Standardization of administration

Opening remarks

The consultation session began with opening remarks from Achim Pross, Deputy Director for the OECD Centre for Tax Policy and Administration, and Alan McLean, Chair of the Business at OECD (BIAC) tax committee. Pross highlighted the importance of stakeholder contributions to shape Pillar Two. He noted that over 40 countries are now introducing Pillar Two rules, so that the focus of this session was compliance and implementation.

Pross said that it is the intention of the OECD to work on a sensible form of administration, indicating that this includes exploring whether permanent simplifications can be made to the GloBE return without undermining the objectives of the Pillar. Many critical comments on the GloBE return were received, including on the data points for the return, so this is taken seriously by the OECD.

In this regard, Pross confirmed that the OECD is working on a Qualified Domestic Minimum Top-up Tax (QDMTT) safe harbor simplification. Pross also stated that it is important to start from the same data points. He said that this ensures, through systemic reviews, that countries are consistent in the application of the rules, which is important for tax certainty. Pross indicated that the OECD is also thinking about compliance costs, including considering if there is anything in the tax environment that may no longer be necessary once Pillar Two comes in force. He did not further elaborate on this.

McLean said that BIAC has serious concerns about the data proposed to be included in the GloBE information return, viewing it as excessive and for many multinational enterprises (MNEs) not administrable in practice. He indicated that the key points in BIAC’s comment submission are that limiting the volume of disclosures required is crucial to the success of Pillar Two (e.g., by requiring information on a jurisdictional basis rather than on a constituent entity by constituent entity basis), the proposed GloBE information return seems a step backward from the well-established self-assessment mechanisms laid out in the OECD’s Forum on Tax Administration’s Tax Administration 3.0 Roadmap and data confidentiality is very important. McLean stressed that being able to provide tax certainty is also critical to the success of Pillar Two. He noted that BIAC’s key points in this area are simplified manageable compliance with appropriate segmentation and exchange of information, consistent design and application of the rules by jurisdictions, the importance of the peer review process and the publication of the result, permanent safe harbors (including the QDMTT safe harbor), adherence by jurisdictions to the agreed rule order and a continued program of administrative guidance. Finally, McLean highlighted the importance of making the rules manageable for businesses and for tax administrations.

Item 1: Tax Certainty

The discussion on tax certainty was moderated by Félicie Bonnet of the OECD Secretariat. She began by highlighting the need for international cooperation in the implementation and administration of the GloBE rules. The comment submissions stressed that this cooperation should include consistent and coordinated application of the GloBE rules and coordinated application of the GloBE rules with existing domestic legislation.

Bonnet noted the need for the OECD to continue to support these aims by issuing additional guidance and publishing a list of qualified rules to provide more certainty to taxpayers. Comment submissions also called for dispute prevention mechanisms, including advance certainty mechanisms, and a transitional approach or grace period allowing for quicker resolution of disputes where certainty could not be provided. Regarding dispute resolution, submissions stressed that the scope of available mechanisms should be broad and should cover disputes between implementing and non-implementing jurisdictions. In addition to mechanisms to resolve matters of double taxation, many responses also called for a mandatory and binding resolution mechanism to resolve potential over-taxation.

Panel One: Providing tax certainty - Why is tax certainty important for the implementation of the GloBE Rules?

The first panel focused on why taxpayers require certainty on the implementation of the GloBE rules, particularly where the current guidance does not cover specific fact patterns and where there are potential conflicts with existing domestic legislation.

The first business panelist raised concerns about variances in implementation timing and local variations in the interpretation of ownership percentages and accounting standards that could potentially result in inconsistencies in the top-up tax calculation. This panelist also stressed the need for clear and consistent definitions of qualifying refundable tax credits and requested that the OECD compile a list of such issues and publish guidance on interpretation.

The second panelist focused on issues related to the order of priority of the rules, such as the interaction of existing controlled foreign company (CFC) regimes with QDMTTs. In addition, the panelist discussed concerns raised by the Administrative Guidance released in February 2023, under which QDMTTs may deviate significantly from the GloBE rules as long as they are more restrictive. This could have the impact of creating a significant additional burden for companies that could be required to prepare detailed QDMTT calculations in multiple jurisdictions.

The third panelist welcomed the Administrative Guidance on the treatment of the US Global Intangible Low-Taxed Income (GILTI) regime and allocation of GILTI taxes for GloBE purposes, noting however that there remains significant uncertainty regarding taxes in other jurisdictions. Further clarifications were also requested on the application of the transition rules, such as the treatment of losses carried forward and transfer pricing adjustments.

Panel Two: Dispute prevention - How can we prevent differences/issues in the application of the rules?

The second panel focused on preventing disputes that could arise through differences in interpretation and application of the GloBE rules, as well as possible mechanisms for seeking advance certainty where specific issues arise.

The first business panelist made several recommendations to simplify the GloBE rules, including a phased lead-in to test how the rules will work (with greater tolerance given to businesses in the early years) and removing constituent entity-level reporting wherever possible. Rather than mandatory binding arbitration, this panelist proposed that any deadlocks be resolved through referral to the Inclusive Framework. Another panelist noted that the proposed referral of issues to the Inclusive Framework may be a useful tool for further guidance on general issues, but that this would not be sufficient for addressing specific issues that arise in a particular case. A third panelist proposed the creation of working groups within the Inclusive Framework, which would draw on best practices and discuss anonymized Pillar Two case studies. This would allow businesses to raise issues to the Inclusive Framework in a near real-time manner. The output from these working groups would then become part of rolling guidance. It was noted that this should be additive to tax certainty processes, rather than a replacement for other dispute prevention mechanisms.

The first business panelist proposed a global mechanism like an Advance Pricing Agreement (APA) program to achieve advance certainty on key elements of the calculations. For issues around the Undertaxed Payments Rule (UTPR), it was proposed that an agreement concluded among relevant jurisdictions would be binding globally. Another panelist noted that existing APA programs, while beneficial from a certainty perspective, can suffer from long lead times. This panelist proposed a bespoke program like the International Compliance Assurance Programme (ICAP), which should be required to give binding outcomes in a timely manner (e.g., within six months).

Panel Three: Dispute resolution - How can we resolve potential differences/issues?

While the previous panel focused on providing clarity to avoid disputes as much as possible, the OECD moderator acknowledged that disputes would inevitably arise. The third panel focused on mechanisms for dispute resolution, including the option of a Multilateral Convention (MLC) as raised in the consultation document.

The panelists welcomed the proposal to introduce an MLC, but they noted that certain characteristics were crucial to this working effectively, including binding arbitration, agreed resolution in line with OECD guidance, broad application and involvement of a subset of Competent Authorities. Given the time that would be needed to develop, sign and ratify an MLC, it was recommended that it should have retroactive effect. In addition, it was suggested that a multilateral agreement may be faster to implement.

An academic panelist recommended a mechanism similar to a model convention, which would be implemented through domestic rules to ensure availability of dispute resolution mechanisms as soon as the Pillar Two rules come into effect. Mirror legislation used by countries that are not able to conclude double tax treaties was used as an example of this in practice.

A business panelist noted that the peer review process should include review of jurisdictions’ implementation of dispute resolution and prevention mechanisms. The panelist recommended use of joint audits and suggested allowing taxpayers to require participation of another tax authority in an ongoing audit.

Item 2: GloBE Information Return

The second part was moderated by John Peterson of the OECD Secretariat. Peterson started by noting that the proposal included in the consultation document was only a starting point for discussion and not the final output. He indicated that the OECD recognizes the concerns expressed in the comment submissions around the difficulties in collecting the data as well as concerns about whether tax administrations need to have access to all the data points particularly in light of the sensitivity of the data. He noted that comment submissions included calls for simplifications and transitional mechanisms, provision of information on a jurisdictional basis instead of an entity basis and coordination of the reporting requirements with existing reporting frameworks such as country-by-country reporting (CbCR).

Panel One: Simplification of data points and return

The first panel focused on the GloBE information return and ways to simplify it. The first business panelist started by outlining the reasons why the information should be aggregated at a jurisdictional level. This panelist explained that each new data point requires the setup of a new process, which is associated with additional costs for businesses. For existing reporting requirements, most MNEs have the data information available on a jurisdictional basis and not on an entity basis. Therefore, he stated that aggregation of data on a net basis by jurisdiction better aligns with existing practices while not compromising appropriate reporting or the Pillar Two objectives.

Another panelist also highlighted the need for further reporting simplifications specifically in relation to cases of changes in the ownership structure of a constituent entity that occur during the reporting fiscal year. In practice, the ownership structure of an entity may change several times in a fiscal year because of coordinated transactions and the requirement to report on each change could be burdensome. The focus should be on the ownership structure at year end and internal changes in ownership structure with no effect on any top-up tax should not require reporting.

A panelist discussed the need for transitional relief in the form of a layered approach to data, with a high level of simplification to be applied in the early years and additional information required in subsequent periods. This could assist companies in putting systems in place to collect data.

The final panelist indicated that with the introduction of the GloBE rules, the OECD should consider how to streamline the information collection requirements between CbCR and the GloBE rules to minimize compliance and duplication.

Panel Two: Standardization of administration

The second panel focused on standardization of administration and filing. The first business panelist highlighted the need for a single central filing obligation with the tax administration of the MNE Group’s ultimate parent entity. This approach would avoid fragmentation and domestic variations that would create significant costs for businesses and would limit disputes. The panelist added that local filing, as a general rule, is a disproportionate requirement and further questioned whether local filing of the GloBE information return in a jurisdiction that has not put in place confidentiality and appropriate use safeguards, or that has not entered into exchange of information instruments, could constitute a breach of the Action 13 minimum standard.

Another panelist proposed the introduction of a system of segmented, tiered disclosure so that the compliance burden on in-scope MNEs is minimized. The panelist explained that the GloBE information return could be segmented into modular parts with jurisdictions only receiving those modules that contain information that they need. Detailed entity level information could be restricted to jurisdictions that require the details to assess top-up taxes.

One panelist focused on the QDMTT, indicating that deference should be given to ordering the applicable rules in determining whether a return filing is required in any jurisdiction. For example, if a QDMTT is applicable to an entity, no information for such QDMTT jurisdiction should be required to be reported to jurisdictions with Income Inclusion Rules or UTPRs.

One panelist focused on the peer review process, stressing that the development of a robust and expeditious peer review process with respect to the implementation of filing requirements for the GloBE information return will be vital for businesses and tax administrations alike. This process should include the establishment of meaningful consequences for jurisdictions with practices that do not conform to the rules and procedures agreed in the Inclusive Framework. The panelist added that it is important to learn from the experience of the roll out of CbCR, which underscores that successful implementation does not depend only on the design of the rules but also on how they are administered and implemented on a daily basis.

Closing remarks

At the close of the virtual meeting, Marco Iuvinale, Chair of Working Party No.11 on Aggressive Tax Planning (which is the group responsible for work on Pillar Two), summarized the key messages from the discussion and outlined the next steps ahead.

Iuvinale reiterated that for tax certainty, it is important that there will be an agreed rule order, administrative guidance, coordinated risk assessment, a procedure for timely certainty and a mechanism for strong binding mandatory dispute resolution. On the GloBE information return, Iuvinale reiterated the need for simplification, limiting the volume of disclosure, exploring the streamlining of reporting requirements, transitional relief and a robust peer review process.

In terms of next steps, Iuvinale noted the continued work on the GloBE information return, with a particular focus on striking the balance between the information required to be filed by MNEs and what is needed by tax authorities for the administration of the GloBE rules. He further indicated that the next steps on tax certainty are focused on continuing to provide guidance on issues, developing the peer review process and exploring tax certainty mechanisms including the possibility of developing an MLC.


The virtual consultation meeting provided a valuable opportunity for businesses to share practical perspectives on implementation of the GloBE rules. The OECD Secretariat representatives acknowledged that there is work still to be done, including more work on balancing the data needs for the GloBE information return, the design of permanent safe harbor rules and the continued development of tax certainty mechanisms. The importance of the commitment to working toward a sensible form of administration and the need for manageable rules was also stressed.

It is important for businesses to continue to monitor developments with respect to Pillar Two over the coming months. Businesses also may want to consider engaging with OECD and country policymakers as they continue to work to further flesh out the mechanics of compliance and administration.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP (Netherlands)
  • Ronald van den Brekel

  • Marlies de Ruiter

Ernst & Young Solutions LLP (Singapore)
  • Luis Coronado
Ernst & Young LLP (United Kingdom)
  • Joel Cooper

  • Astrid Vroom

  • Emma Lobo

Ernst & Young LLP (United States)
  • Barbara M. Angus

  • Tracee Fultz

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.