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Technical Line - Preparing for a global minimum tax under the OECD’s Pillar Two Global Anti-Base Erosion model rules

16 Feb 2023 PDF
Subject AccountingLink
Topics Income taxes
Publications Technical Line


Our Technical Line addresses the Pillar Two Global Anti-Base Erosion (GloBE) model rules issued by the Organisation for Economic Co-operation and Development (OECD) that define the scope and mechanics of a 15% global minimum tax. Multinational entities with consolidated financial statement revenue of more than EUR750 million need to monitor legislation in the jurisdictions in which they operate because OECD member countries are expected to enact the rules in 2023 with effective dates beginning on 1 January 2024. The FASB staff said in response to a technical inquiry that it believes the GloBE minimum tax is an alternative minimum tax as discussed in ASC 740. Therefore, the tax an entity would pay under the GloBE rules would be recognized in the period it arises, and deferred tax assets and liabilities would not be recognized or adjusted for the estimated future effects of the minimum tax. Therefore, companies will need to consider the effects of the GloBE minimum tax in the period that includes the date the laws are effective. South Korea is currently the only nation to have enacted legislation consistent with the GloBE rules.

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