On 11 September 2026, the OECD/G20 Inclusive Framework on BEPS released a package of Pillar Two materials that includes an updated GloBE Information Return (GIR), additional Administrative Guidance and a framework for the full legislative review process. The package shows the OECD's continuing shift from Pillar Two implementation toward administration, compliance and consistency across domestic regimes. The Administrative Guidance addresses two areas where uncertainty remained under the GloBE Rules, while the legislative review framework sets out how Inclusive Framework (IF) members will assess whether domestic Pillar Two regimes meet the agreed GloBE standards.
A key component of the package is the updated GIR. The revised return incorporates changes agreed as part of the January 2026 side-by-side package, including the new permanent safe harbour framework, notably the simplified ETR test and other simplification measures adopted by the IF (for prior coverage, see the article in the February 2026 issue of Corporate Tax News). The revised return will apply for fiscal years beginning on or after 31 December 2025, and an updated XML schema is expected to follow.
The GIR is the primary reporting vehicle through which tax authorities obtain information on an MNE group's application of the GloBE rules. Groups that have already established Pillar Two reporting processes should review the revised return and assess whether updates to their existing data collection, reporting procedures and technology solutions are required. The revisions may be particularly relevant for groups benefiting from the side-by-side framework, which currently primarily benefits U.S.-headed groups operating through subsidiaries in jurisdictions that apply the GloBE rules. Even where no domestic Pillar Two liability arises at the ultimate parent entity (UPE) level, such groups may still need to gather and report extensive Pillar Two information.
One of the most important changes reflected in the revised GIR relates to the permanent safe harbour framework. The simplified ETR test is intended to reduce compliance burdens for eligible groups by limiting the amount of detailed information that must be gathered and reported. However, the extent of the simplification will depend on each group’s facts and circumstances and should be assessed on a case-by-case basis.
The package also contains guidance on the treatment of explicitly conditional taxes. These taxes apply only where a constituent entity is subject to a qualified IIR or qualified UTPR in another jurisdiction and is not eligible for the side-by-side safe harbour, or conversely do not apply where those conditions are not fulfilled. The guidance confirms that such taxes are not covered taxes for GloBE purposes and therefore are excluded from adjusted covered taxes when calculating a jurisdictional effective tax rate. Where the conditional feature takes the form of a separate surcharge, the surcharge may be treated separately from the underlying tax, allowing the generally applicable tax to remain a covered tax.
The OECD also clarifies that a domestic minimum top-up tax (DMTT) that constitutes an explicitly conditional tax cannot qualify as a QDMTT, subject to a limited transitional exception for certain arrangements applicable in respect of fiscal years beginning before 1 January 2025, including the conditional DMTT regimes introduced in the Bahamas and Barbados, which retained their qualified status through 2024. Further guidance on other potentially discriminatory tax features is expected before the end of 2026.
The OECD also provides guidance on the interaction between QDMTT regimes that rely on local accounting standards and the conditions for accessing the QDMTT safe harbour. Questions had arisen where the fiscal period used in local financial accounts differed from the fiscal year of the UPE's consolidated financial statements. The guidance clarifies that differences between the fiscal period used in local financial accounts and the fiscal year of the UPE’s consolidated financial statements will not necessarily prevent the use of local financial accounts for QDMTT purposes or access to the QDMTT safe harbour. This provides additional certainty for jurisdictions that rely on local accounting standards when applying their QDMTT regimes.
The package also contains the Terms of Reference and Assessment Methodology for the Full Legislative Review process. The framework establishes a peer review process through which IF members will assess whether domestic IIR, UTPR and QDMTT legislation is consistent with the GloBE model rules, Commentary and Administrative Guidance. To date, jurisdictions have relied on a temporary self-assessment process to evaluate whether their legislation is consistent with the agreed GloBE standards. Going forward, those assessments will be carried out through a peer-review process conducted within the IF. The framework will therefore be important in determining whether domestic IIR, UTPR and QDMTT regimes continue to qualify under the agreed GloBE standards.
The September 2026 package highlights that Pillar Two is entering a new phase, with increased attention on administration, reporting and the consistent application of the rules across jurisdictions. Although many changes will primarily affect reporting periods beginning on or after 31 December 2025, MNE groups should begin assessing how the revised GIR and permanent safe harbour framework will affect their existing data collection and reporting processes.
The updated GIR is particularly relevant for groups that may benefit from the January 2026 side-by-side package, including the simplified ETR test and other simplification measures. While these changes may reduce compliance burdens for eligible groups, their practical impact will depend on the specific facts and circumstances of each organisation and should be evaluated on a case-by-case basis.
The additional Administrative Guidance shows that the OECD continues to refine areas of uncertainty within the Pillar Two framework, while the full legislative review process signals greater scrutiny of domestic Pillar Two regimes and a more formal assessment of whether jurisdictions continue to meet the agreed GloBE standards. As the rules continue to evolve, taxpayers should monitor future OECD guidance and developments in the jurisdictions in which they operate.
Frederik Boulogne
Nathalie Bravo
BDO in Netherlands
Updated GloBE Information Return
A key component of the package is the updated GIR. The revised return incorporates changes agreed as part of the January 2026 side-by-side package, including the new permanent safe harbour framework, notably the simplified ETR test and other simplification measures adopted by the IF (for prior coverage, see the article in the February 2026 issue of Corporate Tax News). The revised return will apply for fiscal years beginning on or after 31 December 2025, and an updated XML schema is expected to follow.The GIR is the primary reporting vehicle through which tax authorities obtain information on an MNE group's application of the GloBE rules. Groups that have already established Pillar Two reporting processes should review the revised return and assess whether updates to their existing data collection, reporting procedures and technology solutions are required. The revisions may be particularly relevant for groups benefiting from the side-by-side framework, which currently primarily benefits U.S.-headed groups operating through subsidiaries in jurisdictions that apply the GloBE rules. Even where no domestic Pillar Two liability arises at the ultimate parent entity (UPE) level, such groups may still need to gather and report extensive Pillar Two information.
One of the most important changes reflected in the revised GIR relates to the permanent safe harbour framework. The simplified ETR test is intended to reduce compliance burdens for eligible groups by limiting the amount of detailed information that must be gathered and reported. However, the extent of the simplification will depend on each group’s facts and circumstances and should be assessed on a case-by-case basis.
Additional Guidance on Explicitly Conditional Taxes
The package also contains guidance on the treatment of explicitly conditional taxes. These taxes apply only where a constituent entity is subject to a qualified IIR or qualified UTPR in another jurisdiction and is not eligible for the side-by-side safe harbour, or conversely do not apply where those conditions are not fulfilled. The guidance confirms that such taxes are not covered taxes for GloBE purposes and therefore are excluded from adjusted covered taxes when calculating a jurisdictional effective tax rate. Where the conditional feature takes the form of a separate surcharge, the surcharge may be treated separately from the underlying tax, allowing the generally applicable tax to remain a covered tax.The OECD also clarifies that a domestic minimum top-up tax (DMTT) that constitutes an explicitly conditional tax cannot qualify as a QDMTT, subject to a limited transitional exception for certain arrangements applicable in respect of fiscal years beginning before 1 January 2025, including the conditional DMTT regimes introduced in the Bahamas and Barbados, which retained their qualified status through 2024. Further guidance on other potentially discriminatory tax features is expected before the end of 2026.
QDMTT Safe Harbour Clarifications
The OECD also provides guidance on the interaction between QDMTT regimes that rely on local accounting standards and the conditions for accessing the QDMTT safe harbour. Questions had arisen where the fiscal period used in local financial accounts differed from the fiscal year of the UPE's consolidated financial statements. The guidance clarifies that differences between the fiscal period used in local financial accounts and the fiscal year of the UPE’s consolidated financial statements will not necessarily prevent the use of local financial accounts for QDMTT purposes or access to the QDMTT safe harbour. This provides additional certainty for jurisdictions that rely on local accounting standards when applying their QDMTT regimes.
Legislative Review Framework
The package also contains the Terms of Reference and Assessment Methodology for the Full Legislative Review process. The framework establishes a peer review process through which IF members will assess whether domestic IIR, UTPR and QDMTT legislation is consistent with the GloBE model rules, Commentary and Administrative Guidance. To date, jurisdictions have relied on a temporary self-assessment process to evaluate whether their legislation is consistent with the agreed GloBE standards. Going forward, those assessments will be carried out through a peer-review process conducted within the IF. The framework will therefore be important in determining whether domestic IIR, UTPR and QDMTT regimes continue to qualify under the agreed GloBE standards.
BDO Insight
The September 2026 package highlights that Pillar Two is entering a new phase, with increased attention on administration, reporting and the consistent application of the rules across jurisdictions. Although many changes will primarily affect reporting periods beginning on or after 31 December 2025, MNE groups should begin assessing how the revised GIR and permanent safe harbour framework will affect their existing data collection and reporting processes.The updated GIR is particularly relevant for groups that may benefit from the January 2026 side-by-side package, including the simplified ETR test and other simplification measures. While these changes may reduce compliance burdens for eligible groups, their practical impact will depend on the specific facts and circumstances of each organisation and should be evaluated on a case-by-case basis.
The additional Administrative Guidance shows that the OECD continues to refine areas of uncertainty within the Pillar Two framework, while the full legislative review process signals greater scrutiny of domestic Pillar Two regimes and a more formal assessment of whether jurisdictions continue to meet the agreed GloBE standards. As the rules continue to evolve, taxpayers should monitor future OECD guidance and developments in the jurisdictions in which they operate.
Frederik Boulogne
Nathalie Bravo
BDO in Netherlands