OECD publishes 334 pages Consolidated Commentary to the Global Anti-Base Erosion Model Rules (2023)

The Global Anti-Base Erosion (GloBE) Rules, part of the OECD/G20 BEPS Project, tackle tax challenges arising from digitalization.

Over 135 jurisdictions joined the initiative in October 2021, recognizing the need to update the international tax system for a globalized, digital economy.

Overview of the GloBE Rules

• GloBE Rules ensure large multinational enterprises (MNEs) pay a minimum level of tax where they operate.

• These rules create a coordinated taxation system imposing a top-up tax when effective tax rates fall below the minimum rate in a jurisdiction.

Key Components of the Commentary

• Released initially in March 2022, the Commentary explains GloBE Rules’ intended outcomes and clarifies key terms.

• It incorporates Agreed Administrative Guidance up to December 2023, providing practical insights for tax administrations and taxpayers.

Purpose and Benefits of the Consolidated Commentary

• The Commentary promotes a common interpretation and application of GloBE Rules.

• It facilitates coordinated outcomes, benefiting both tax administrations and MNEs by preventing tax base erosion and profit shifting.

Guidance for Tax Administrations and Taxpayers

• The Commentary offers guidance on interpreting and applying GloBE Rules to various scenarios, ensuring consistency.

• It includes examples to illustrate how these rules operate in practice, aiding understanding and compliance.

Consolidated Commentary is accessible via this link:

Tax Challenges Arising from the Digitalisation of the Economy – Consolidated Commentary to the Global Anti-Base Erosion Model Rules (2023): Inclusive Framework on BEPS | READ online (oecd-ilibrary.org)