Who is in scope for Pillar Two?

Groups with 750m EUR consolidated revenue in 2 of 4 prior years. Check exclusions for government, nonprofit, pension, and investment funds plus de minimis.

What are IIR, UTPR, and QDMTT?

IIR taxes low-taxed foreign income at the parent. UTPR backstops via denial or allocation. QDMTT lets the source country collect the top-up first. Ordering matters for cash-tax forecasting.

What data does GloBE need?

Jurisdictional ETR inputs: GloBE income, covered taxes, substance carve-outs, deferred tax recast. Most ERPs do not produce this natively — plan ETL and controls.

Are there transitional safe harbours?

Yes: CbCR-based transitional tests for 2024-2026 (extended in guidance) plus permanent QDMTT and simplified ETR safe harbours. Document election and test each jurisdiction annually.

TAX

Pillar Two GloBE 15% Minimum Tax in 2026: Scope, Top-Up, and Safe Harbours

BATO Editorial Team October 28, 2026 3 min read

Why 2026 Is the Compliance Year

QDMTTs went live broadly in 2024-2025; UTPR phasing hits in 2026-2027. Auditors now ask for GloBE provision support at year-end.

Pair with Transfer Pricing, Transfer Pricing Docs, Corporate Tax Systems, and Tax Filing Deadlines.

Mechanics in One Page

Rule	Who pays	Trigger
QDMTT	Local entity	Jurisdictional ETR <15%
IIR	Ultimate parent	Low-taxed CFC income
UTPR	Other group entities	Untaxed residual

Calculate jurisdictional ETR = covered taxes / GloBE income, subtract substance carve-out, apply top-up % to excess profit.

Data and Controls Checklist

Entity chart + ownership + CbCR alignment.
GloBE income adjustments mapped from GL — see Chart of Accounts.
Covered taxes with deferred recast at 15% cap.
Safe-harbour test file per jurisdiction with sign-off.
Provision tied to Year-End Close and SOX 404 evidence standards.

Link to Month-End Close for quarterly ETR true-up and to Financial Statement Analysis for disclosure.

Common Gaps

Missing payroll + tangible asset carve-out data.
Deferred tax at23%+ not recast to 15%.
Intercompany mismatches vs transfer-pricing master file.
No UTPR cash forecast by payment date.

Worked Example: Singapore Hub at 9% ETR

Group revenue €2bn. Singapore sub: GloBE income €80m, covered taxes €7.2m (9% ETR), payroll carve-out €3m, tangible-asset carve-out €2m.

Step	Math	Result
ETR	€7.2m / €80m	9%
Top-up %	15% − 9%	6%
Excess profit	€80m − €5m carve-out	€75m
Top-up tax	6% × €75m	€4.5m
Who collects	Singapore QDMTT (if enacted) else parent IIR	Calendar the right return

Without the carve-out, the bill is €4.8m — small here, material across 20 jurisdictions. And without the transitional CbCR safe harbour test (revenue/ETR/de minimis by jurisdiction), every low-tax jurisdiction needs the full computation. Run the safe-harbour screen first: jurisdictions passing it need documentation, not math — see Tax Filing Deadlines for calendar pressure.

ETL Reality: What ERPs Don’t Give You

No major ERP produces GloBE income natively. The build:

Trial balance by entity from consolidation — see Consolidation — mapped to GloBE adjustments (excluded dividends/equity gains, stock comp timing, pension, policy-disallowed fines).
Covered taxes from provision + deferred recast capped at 15% — deferred assets accrued above 15% get haircut; track the recast in a dedicated schedule or the provision never ties.
Payroll + tangible assets by jurisdiction for carve-outs — HRIS and fixed-asset registers that were never jurisdiction-tagged need remediation — see Fixed Assets.
Intercompany cross-check to the TP master file — a management fee deducted in one jurisdiction and untaxed in another is both a TP and a GloBE problem — see TP Docs and Related Party.

Version-freeze the ETL each quarter with preparer/reviewer sign — see SOX 404 — because restated inputs cascade through every jurisdiction’s top-up.

UTPR Cash Planning (The 2026 Surprise)

UTPR allocates residual top-up to group entities via headcount/tangible-asset keys — meaning a profitable, fully-taxed operating company can owe UTPR cash for a sibling’s low-taxed income. Forecast UTPR by payment date per entity, fund it in the Cash Forecast, and disclose the mechanism to local CFOs early — nothing damages a shared-service relationship like an unexplained multi-million top-up charge. Coordinate with Treasury on funding flows and Going Concern where material.