# Pillar Two GloBE Readiness Assessment: [Group name] FY[YYYY]

> Readiness assessment and work plan for the global minimum tax (Pillar
> Two) of a multinational group: scope test, jurisdiction implementation
> status (IIR, UTPR, QDMTT), safe harbour assessment, data map for GloBE
> income, covered taxes and the substance-based income exclusion, GloBE
> Information Return (GIR) filing approach, systems, deferred tax and
> provision effects, timeline, owners and risks. Based on the OECD Global
> Anti-Base Erosion Model Rules (Pillar Two) and their Administrative
> Guidance, including the Side-by-Side Package approved by the Inclusive
> Framework on 2026-01-05, and on Council Directive (EU) 2022/2523 and
> Council Directive (EU) 2025/872 (DAC9), as published at 2026-10. Replace
> every `[bracketed]` value and every row marked *Example*. This is a
> document format, not tax, legal, accounting or financial advice. Obtain
> the Model Rules, the Administrative Guidance and each domestic law for
> the normative text.

<!--
Guidance: How to use this template
- Use it once a year (or when the group first approaches the EUR 750m
  revenue threshold) to decide which jurisdictions need full GloBE
  computations, which can rely on a safe harbour, who files the GIR and
  where, and what data the finance systems must capture.
- Fill section 1 (scope test) and section 2 (jurisdiction status) first.
  Every later section depends on them. Record the date at which each
  jurisdiction's status was checked: domestic Pillar Two laws change
  several times a year.
- The worked example uses the fictional Ostrander Group N.V.: an IFRS
  reporter with functional currency EUR, calendar financial year, parent
  OST-NL in the Netherlands and subsidiaries OST-DE (Germany), OST-UK,
  OST-US and OST-VN (Vietnam). Consolidated revenue was EUR 755m in
  FY2023, EUR 760m in FY2024, EUR 820m in FY2025 and EUR 900m in FY2026.
  The same group and figures appear in the transfer pricing, CbCR, income
  tax provision and tax strategy templates. All amounts are EUR million
  unless stated (CbCR workpaper figures, which are in EUR thousand,
  divided by 1,000).
- Keep the readiness assessment separate from the GIR itself. The GIR is
  a regulated return filed in a prescribed XML format; this document is
  the internal plan, evidence index and decision record behind it.
- Related documents: Income Tax Provision (`finance/income-tax-provision`),
  Country-by-Country Report Workpaper
  (`finance/country-by-country-report-workpaper`), Transfer Pricing Master
  File (`finance/transfer-pricing-master-file`), Tax Strategy Statement
  (`finance/tax-strategy-statement`), Month-End Close Checklist
  (`finance/month-end-close-checklist`), Risk Register
  (`compliance/risk-register`).
-->

## Document control

<!-- Guidance: One assessment per group and fiscal year. Name the person accountable for Pillar Two compliance (usually the head of tax) and the finance owner of the data. Pitfall: an assessment owned only by tax, with no named owner in group reporting for the data feeds. -->

| Field | Value |
|---|---|
| Document ID | [P2-RA-FY2025] |
| Group and ultimate parent entity (UPE) | [Group name], [UPE legal name and jurisdiction] *Example:* Ostrander Group N.V. (OST-NL), UPE resident in the Netherlands |
| Fiscal year assessed | [YYYY-MM-DD to YYYY-MM-DD] *Example:* 2025-01-01 to 2025-12-31 |
| Consolidated financial statements basis | [IFRS / US GAAP / other acceptable standard] |
| Presentation currency and units | [EUR million] |
| Version | [0.1] |
| Status | [Draft / In review / Approved / Superseded] |
| Owner | [@head-of-tax] |
| Data owner | [@group-financial-controller] |
| Approvers/reviewers | [@cfo], [@audit-committee-chair], [@external-tax-adviser] |
| Last updated | YYYY-MM-DD |
| Jurisdiction status checked as of | YYYY-MM-DD *Example:* 2026-10-25 |
| Classification | [Confidential: tax and finance] |
| Related documents | [Income tax provision], [CbC report], [Transfer pricing master file], [GIR filing log] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Head of tax | [@name] | [Recommend / Return] | YYYY-MM-DD |
| Chief Financial Officer | [@name] | [Approve / Approve with conditions / Reject] | YYYY-MM-DD |
| Audit committee (for information) | [@chair] | [Noted] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First draft: scope test and jurisdiction table |
| 0.2 | YYYY-MM-DD | [@name] | *Example:* Safe harbour results added; Vietnam shadow computation added |
| 1.0 | YYYY-MM-DD | [@name] | Approved by the CFO |

## Contents

- [1. Scope and group structure](#1-scope-and-group-structure)
- [2. Jurisdiction implementation status](#2-jurisdiction-implementation-status)
- [3. Safe harbour assessment](#3-safe-harbour-assessment)
- [4. Data map: GloBE income, covered taxes and SBIE](#4-data-map-globe-income-covered-taxes-and-sbie)
- [5. Full computation for jurisdictions without a safe harbour](#5-full-computation-for-jurisdictions-without-a-safe-harbour)
- [6. GIR content and filing approach](#6-gir-content-and-filing-approach)
- [7. Systems, controls and XML schema](#7-systems-controls-and-xml-schema)
- [8. Deferred tax, provision and disclosure impacts](#8-deferred-tax-provision-and-disclosure-impacts)
- [9. Timeline and owners](#9-timeline-and-owners)
- [10. Risks, issues and open questions](#10-risks-issues-and-open-questions)
- [11. Glossary and references](#11-glossary-and-references)
- [Standard and licence note](#standard-and-licence-note)

## 1. Scope and group structure

<!-- Guidance: Purpose: decide whether the group is in scope and which entities count. Questions: Did consolidated revenue reach EUR 750m in at least two of the four preceding fiscal years? Which entities are excluded entities (for example pension funds, investment funds that are UPEs)? Pitfall: testing current-year revenue instead of the four preceding years, or forgetting that a merger or demerger changes the test. -->

The GloBE Rules apply to constituent entities of a multinational group
whose annual revenue in the consolidated financial statements of the
ultimate parent entity was EUR 750 million or more in at least two of
the four fiscal years immediately before the tested year (Model Rules
Article 1.1; EU Directive 2022/2523 Article 2). Record the four-year
test from the audited consolidated accounts, adjust for short or long
fiscal years as the rules require, and keep the evidence with the
assessment.

### 1.1 Revenue threshold test

| Fiscal year | Consolidated revenue (EUR m) | At or above EUR 750m? | Source |
|---|---|---|---|
| FY2021 *(Example)* | 610 | No | Audited consolidated accounts |
| FY2022 *(Example)* | 690 | No | Audited consolidated accounts |
| FY2023 *(Example)* | 755 | Yes | Audited consolidated accounts |
| FY2024 *(Example)* | 760 | Yes | Audited consolidated accounts |
| Result for FY2025 | | In scope (2 of 4 years) | [@head-of-tax] |

*Example:* Ostrander Group N.V. first met the threshold in FY2023 and
FY2024, so it is in scope for the fiscal year starting 2025-01-01. The
FY2024 test (FY2020 to FY2023) used only one qualifying year, so the
group was outside scope for FY2024 and had no FY2024 GIR to file. FY2025
is therefore the first GloBE year. Under Model Rules Articles 8.1.6 and
9.4.1, and the matching filing and transitional provisions of EU
Directive 2022/2523 (Article 44 and the transitional rules), the first
GIR is due no later than 18 months after the end of the first fiscal
year in scope; for FY2025
that is 2027-06-30. Confirm in each jurisdiction that the "first year"
extension applies to the group's first year in scope and not only to
fiscal year 2024.

### 1.2 Constituent entities

| Entity ID | Legal entity | Jurisdiction | Ownership | Entity type | Status for GloBE |
|---|---|---|---|---|---|
| CE-001 *(Example)* | Ostrander Group N.V. (OST-NL) | Netherlands | UPE | Ultimate parent entity, principal and group treasury | Constituent entity |
| CE-002 *(Example)* | Ostrander Deutschland GmbH (OST-DE) | Germany | 100% | Limited-risk distributor | Constituent entity |
| CE-003 *(Example)* | Ostrander UK Ltd (OST-UK) | United Kingdom | 100% | Limited-risk distributor | Constituent entity |
| CE-004 *(Example)* | Ostrander Inc (OST-US) | United States | 100% | Limited-risk distributor | Constituent entity |
| CE-005 *(Example)* | Ostrander Vietnam Co., Ltd (OST-VN) | Vietnam | 100% | Contract software development centre | Constituent entity |
| CE-006 *(Example)* | Ostrander Staff Pension Trust | Netherlands | Not consolidated | Pension fund | Excluded entity (confirm) |

Map every legal entity in the consolidation perimeter, plus permanent
establishments, which the rules treat as separate constituent entities.
Flag joint ventures, minority-owned entities, investment entities, flow
through entities and stateless entities, because each has special
rules. Reconcile the list to the legal entity register and to Table 2 of
the CbC report: differences between the two lists are the most common
source of GIR errors.

### 1.3 Group structure

Draw the legal ownership chain from the UPE to every constituent entity,
including intermediate holding companies and permanent establishments.

```mermaid
flowchart TD
  UPE["Ostrander Group N.V. (OST-NL, Netherlands, UPE)"] --> DE["Ostrander Deutschland GmbH (OST-DE)"]
  UPE --> UK["Ostrander UK Ltd (OST-UK)"]
  UPE --> US["Ostrander Inc (OST-US)"]
  UPE --> VN["Ostrander Vietnam Co., Ltd (OST-VN)"]
```

## 2. Jurisdiction implementation status

<!-- Guidance: Purpose: know which rule bites where. Questions: Has each jurisdiction enacted an IIR, a UTPR, a QDMTT? From which fiscal year? Is the QDMTT listed as qualified and eligible for the QDMTT safe harbour? Has the jurisdiction joined the central filing understanding for the GIR? Pitfall: relying on a status table from last year; laws and OECD Central Record entries change during the year. -->

Pillar Two has three charging mechanisms. A qualified domestic minimum
top-up tax (QDMTT) lets the source jurisdiction collect the top-up tax
on low-taxed local profits first. The income inclusion rule (IIR) lets
the parent jurisdiction collect any remaining top-up tax of low-taxed
subsidiaries. The undertaxed profits rule (UTPR) is the backstop that
allocates residual top-up tax to other jurisdictions where the group
operates. Status depends on domestic law, not on the Model Rules, so
record the legal basis and the effective date for each jurisdiction.

| Jurisdiction | QDMTT | IIR | UTPR | Central GIR filing understanding | Legal basis | Checked |
|---|---|---|---|---|---|---|
| Netherlands *(Example)* | From FY2024 | From FY2024 | From FY2025 | Joined (check list) | Minimum Tax Act 2024, implementing Directive 2022/2523 | 2026-10-25 |
| Germany *(Example)* | From FY2024 | From FY2024 | From FY2025 | Joined (check list) | Minimum Tax Act (Mindeststeuergesetz), implementing Directive 2022/2523 | 2026-10-25 |
| United Kingdom *(Example)* | From FY2024 (domestic top-up tax) | From FY2024 (multinational top-up tax) | From FY2025 | Joined (check list) | Finance (No. 2) Act 2023 Part 3, as amended | 2026-10-25 |
| United States *(Example)* | None | None | None | Not applicable | No Pillar Two legislation; side-by-side status per OECD Central Record | 2026-10-25 |
| Vietnam *(Example)* | From FY2024 | From FY2024 | Not enacted | Had not joined as of 2026-05-12 | National Assembly Resolution 107/2023/QH15 and Decree 236/2025/ND-CP (issued 2025-08-29, effective 2025-10-15, applies from FY2024; check) | 2026-10-25 |

Status as of 2026-10; check local law and the OECD Central Record before
relying on any row. "From FY2024" means fiscal years beginning on or
after 2023-12-31; "From FY2025" means fiscal years beginning on or after
2024-12-31. EU Member States implement the IIR and UTPR through
Directive 2022/2523; Article 50 lets a Member State with few in-scope
parent groups postpone the IIR and UTPR, so check whether any EU
jurisdiction in your structure used that option.

The United States has not enacted Pillar Two rules. Under the
Side-by-Side Package, a group whose UPE is in a jurisdiction listed on
the Central Record as having a qualified side-by-side regime can elect a
safe harbour that switches off the IIR and UTPR, while QDMTTs still
apply everywhere. For a US-parented group, check the Central Record for
the current listing; for Ostrander, whose UPE is Dutch, the US is only a
source jurisdiction with no QDMTT, so any top-up tax for the US
subsidiary would be collected under the Dutch IIR.

The OECD released a common understanding on central filing of the GIR
on 2026-05-18. Jurisdictions that joined it agreed not to penalise
groups that filed the GIR centrally in a listed jurisdiction and made
the local notification, while bilateral exchange relationships are
activated. As of 2026-05-12 several jurisdictions, including Vietnam,
had not joined, so plan a local filing there unless local guidance says
otherwise.

## 3. Safe harbour assessment

<!-- Guidance: Purpose: avoid full GloBE computations where a safe harbour applies. Questions: Is the CbC report qualifying (prepared from qualified financial statements)? Which test passes in each jurisdiction? Is the election made in the GIR? Was a jurisdiction already failed in an earlier year ("once out, always out")? Pitfall: using management accounts instead of the qualified financial statements that feed the CbC report. -->

Four families of safe harbours matter for fiscal years up to 2027. List
each one, the years it covers, and whether the group can use it.

| Safe harbour | Years available | Conditions in brief (own words) | Relevance for the group |
|---|---|---|---|
| Transitional CbCR Safe Harbour (TCSH) | Fiscal years beginning on or before 2027-12-31, excluding a fiscal year ending after 2029-06-30 (extended by the Side-by-Side Package) | Pass one test per jurisdiction using qualifying CbC data: de minimis, simplified ETR at or above the transition rate, or routine profits | Primary tool for FY2025 to FY2027 *Example* |
| Simplified ETR Safe Harbour | Elective for fiscal years beginning on or after 2026-12-31; earlier from 2025-12-31 where every jurisdiction with taxing rights allows it | Simplified ETR computed from financial accounts with set adjustments meets the threshold | Replaces the TCSH ETR test from FY2027 or FY2028 *Example* |
| QDMTT Safe Harbour | Where the local QDMTT is listed as meeting the safe harbour standards | Top-up tax under the IIR or UTPR deemed zero for that jurisdiction | Vietnam, Germany, Netherlands, UK if listed; check Central Record |
| Side-by-Side and UPE Safe Harbours | Fiscal years beginning on or after 2026-01-01, or a later year listed on the Central Record | UPE located in a jurisdiction with a qualified side-by-side regime (or, for the UPE safe harbour, a qualified domestic regime) | Not available: Ostrander's UPE is in the Netherlands *Example* |
| Substance-based Tax Incentive Safe Harbour | Fiscal years beginning on or after 2026-01-01 | Qualified tax incentives (mainly expenditure-based) up to a substance cap are treated favourably in the ETR | Review the Vietnam 10% rate incentive from FY2026 *Example* |
| Transitional UTPR Safe Harbour | UPE jurisdiction with a corporate rate of at least 20%; fiscal years of 12 months or less beginning on or before 2025-12-31 and ending on or before 2027-01-03 (as amended 2026-05-18) | UTPR top-up tax in the UPE jurisdiction deemed zero | Netherlands UPE: no UTPR exposure in FY2025 *Example* |

Under the TCSH, the transition rate for the simplified ETR test is 15%
for fiscal years beginning in 2023 and 2024, 16% for 2025, and 17% for
2026 and 2027. The de minimis test requires CbC revenue below EUR 10m
and profit before tax below EUR 1m in the jurisdiction. The routine
profits test passes when profit before tax does not exceed the
substance-based income exclusion computed for the jurisdiction. A
jurisdiction that fails all tests in a year cannot use the TCSH in a
later year, so record the first failure carefully.

### 3.1 TCSH results for FY2025

Inputs come from the qualifying CbC report (EUR m). Simplified covered
taxes are the income tax expense in the qualified financial statements,
excluding non-covered taxes and uncertain tax positions.

| Test ID | Jurisdiction | CbC revenue | Profit before tax | Simplified covered taxes | Simplified ETR | SBIE | De minimis | ETR test (16%) | Routine profits | Result |
|---|---|---|---|---|---|---|---|---|---|---|
| SH-001 *(Example)* | Netherlands | 743.0 | 58.47 | 16.10 | 27.54% | 14.55 | Fail | Pass | Fail | Safe harbour applies (ETR test) |
| SH-002 *(Example)* | Germany | 191.0 | 5.70 | 1.76 | 30.88% | 4.20 | Fail | Pass | Fail | Safe harbour applies (ETR test) |
| SH-003 *(Example)* | United Kingdom | 137.0 | 4.10 | 1.06 | 25.85% | 3.26 | Fail | Pass | Fail | Safe harbour applies (ETR test) |
| SH-004 *(Example)* | United States | 205.0 | 3.03 | 0.76 | 25.08% | 5.69 | Fail | Pass | Pass | Safe harbour applies (ETR and routine profits tests) |
| SH-005 *(Example)* | Vietnam | 122.0 | 8.70 | 0.91 | 10.46% | 8.90 | Fail | Fail | Pass (margin 0.20) | Safe harbour applies (routine profits test); shadow computation in section 5 |
| Total | | 1,398.0 | 80.00 | 20.59 | | | | | | |

Check: revenues 743.0 + 191.0 + 137.0 + 205.0 + 122.0 = 1,398.0; profit
before tax 58.47 + 5.70 + 4.10 + 3.03 + 8.70 = 80.00; taxes 16.10 + 1.76
+ 1.06 + 0.76 + 0.91 = 20.59; Vietnam ETR 0.91 / 8.70 = 10.46%.

*Example:* CbC revenue follows the same basis as the Country-by-Country
Report Workpaper (`finance/country-by-country-report-workpaper`):
unrelated plus related-party revenue, before eliminations. Total CbC
revenue of EUR 1,398.0m includes EUR 578.0m of intra-group revenue (OST-NL
sales, service charges and interest to subsidiaries 470.0; OST-VN
development fee 108.0), which reconciles to consolidated revenue of EUR
820.0m. Vietnam fails the ETR test because Ostrander Vietnam Co., Ltd
applies a preferential corporate income tax rate of 10% for qualifying
software production (a rate incentive under Vietnamese law; check the
current incentive law and the entity's eligibility). It fails the de
minimis test because its revenue is above EUR 10m. It passes the routine
profits test, because profit before tax of EUR 8.70m does not exceed the
SBIE of EUR 8.90m (section 4.3): a labour-intensive cost-plus service
centre earns little more than its substance carve-out. The margin is
only EUR 0.20m, so treat the pass as fragile and keep the full
computation in section 5 as a shadow calculation. The same test passes
again in FY2026 by EUR 0.06m (CbCR workpaper section 9.3). If Vietnam
ever fails all three tests, it can never use the TCSH again.

Review each "Pass" for robustness: a pass based on a 16% threshold with
a margin of under two percentage points can turn into a fail in a later
year when the transition rate rises to 17%. Keep a margin column in the
working file and alert the head of tax when the margin falls below the
alert level set in section 10.

## 4. Data map: GloBE income, covered taxes and SBIE

<!-- Guidance: Purpose: show where every number in the GIR comes from. Questions: Which ledger accounts feed financial accounting net income or loss for each constituent entity? Which adjustments need data the ledger does not hold (for example equity gains, stock-based compensation elections, deferred tax recast at 15%)? Pitfall: building the data at jurisdiction level only; the GIR needs some data per constituent entity. -->

GloBE computations start from the financial accounting net income or
loss of each constituent entity as used to prepare the UPE's
consolidated accounts, before intra-group eliminations. Adjustments then
convert it to GloBE income or loss. Covered taxes start from the current
and deferred tax expense in the same accounts and are adjusted,
including the recast of deferred tax at the 15% minimum rate. The
substance-based income exclusion (SBIE) uses payroll costs of eligible
employees and the carrying value of eligible tangible assets in the
jurisdiction.

### 4.1 Data elements

| Data ID | Data element | Model Rules reference | Source system | Granularity | Owner | Gap? |
|---|---|---|---|---|---|---|
| DAT-001 *(Example)* | Financial accounting net income or loss | Article 3.1 | Consolidation system, entity ledgers | Constituent entity | [@group-reporting] | No |
| DAT-002 *(Example)* | Net taxes expense (add back) | Article 3.2.1(a) | Tax provision tool | Constituent entity | [@tax-reporting] | No |
| DAT-003 *(Example)* | Excluded dividends and excluded equity gain or loss | Article 3.2.1(b), (c) | Investment ledger | Constituent entity | [@group-reporting] | Partial: equity gains not tagged |
| DAT-004 *(Example)* | Policy disallowed expenses (fines, bribes) | Article 3.2.1(g) | Legal cost codes | Constituent entity | [@legal-finance] | Yes |
| DAT-005 *(Example)* | Stock-based compensation election data | Article 3.2.2 | Payroll and equity plan system | Constituent entity | [@reward] | Yes |
| DAT-006 *(Example)* | Current tax expense on covered taxes | Article 4.1 | Tax provision tool | Constituent entity | [@tax-reporting] | No |
| DAT-007 *(Example)* | Deferred tax recast at 15% and exclusions | Article 4.4 | Deferred tax roll-forward | Constituent entity | [@tax-reporting] | Partial |
| DAT-008 *(Example)* | Eligible payroll costs | Article 5.3.3 | HR and payroll system | Jurisdiction | [@payroll] | Partial: contractors not split |
| DAT-009 *(Example)* | Eligible tangible assets carrying value (average of opening and closing) | Article 5.3.4 | Fixed asset register | Jurisdiction | [@fixed-assets] | No |
| DAT-010 *(Example)* | Qualified refundable tax credits | Article 3.2.4 and definitions | Tax credit register | Constituent entity | [@tax-reporting] | Yes |

Mark each gap with an action in section 9. A gap rated "Yes" means the
data does not exist today; "Partial" means it exists but is not tagged
or not at the needed granularity. Document how each manual adjustment
is calculated, who reviews it, and how it ties back to the ledger.

### 4.2 Covered taxes

Covered taxes include taxes on income or profits, taxes in lieu of a
generally applicable income tax, and taxes on retained earnings and
corporate equity. They exclude top-up tax under a qualified IIR, UTPR
or QDMTT, and certain other items. Build the covered tax figure per
constituent entity from the tax provision workpapers, and show the
bridge from the total tax expense in the accounts to adjusted covered
taxes. Uncertain tax positions recorded in the accounts are excluded
until paid, so the provision workpaper must tag them separately (see
Income Tax Provision, `finance/income-tax-provision`).

### 4.3 Substance-based income exclusion

The SBIE equals a payroll carve-out plus a tangible asset carve-out.
After the transition period both rates are 5%. During the transition,
higher rates set in Model Rules Article 9.2 apply and decline each year;
check the rate table for the fiscal year being computed.

$$\text{SBIE} = r_{\text{payroll}} \times \text{Eligible payroll costs} + r_{\text{assets}} \times \text{Eligible tangible assets}$$

| Jurisdiction | Eligible payroll | Payroll rate FY2025 | Eligible tangible assets (average) | Asset rate FY2025 | SBIE |
|---|---|---|---|---|---|
| Netherlands *(Example)* | 112.00 | 9.6% | 50.00 | 7.6% | 14.552 |
| Germany *(Example)* | 37.00 | 9.6% | 8.50 | 7.6% | 4.198 |
| United Kingdom *(Example)* | 29.00 | 9.6% | 6.20 | 7.6% | 3.255 |
| United States *(Example)* | 52.00 | 9.6% | 9.20 | 7.6% | 5.691 |
| Vietnam *(Example)* | 80.00 | 9.6% | 16.00 | 7.6% | 8.896 |

*Example:* For Vietnam, 80.00 x 9.6% = 7.680 and 16.00 x 7.6% = 1.216,
so the SBIE is 8.896. Vietnam's payroll is large relative to its profit
because OST-VN employs about 2,900 engineers and support staff (FY2026
personnel cost EUR 86.4m in the Transfer Pricing Local File,
`finance/transfer-pricing-local-file`). The FY2026 rates fall to 9.4% and
7.4%, and to 9.2% and 7.2% in FY2027, so the carve-out shrinks every
year unless payroll grows; model the routine profits margin forward at
each budget cycle.

## 5. Full computation for jurisdictions without a safe harbour

<!-- Guidance: Purpose: compute the jurisdictional ETR and top-up tax where no safe harbour applies, and identify who collects it. Questions: What are GloBE income and adjusted covered taxes? What is the excess profit after the SBIE? Does a QDMTT collect the top-up tax locally? Pitfall: forgetting that the QDMTT is credited first, so an IIR liability in the parent jurisdiction arises only for any amount the QDMTT does not cover. -->

For each jurisdiction that fails every safe harbour, compute the
jurisdictional effective tax rate, the top-up tax percentage, the excess
profit and the top-up tax. The minimum rate is 15%. Run the same
computation as a shadow calculation for any jurisdiction that passes a
safe harbour by a thin margin, so the exposure is known before the
margin is lost.

$$\text{ETR} = \frac{\text{Adjusted covered taxes}}{\text{Net GloBE income}}$$

$$\text{Top-up tax \%} = \max(0,\ 15\% - \text{ETR})$$

$$\text{Jurisdictional top-up tax} = \text{Top-up tax \%} \times (\text{Net GloBE income} - \text{SBIE}) + \text{Additional top-up tax} - \text{QDMTT payable}$$

| Line | Item | Vietnam FY2025, shadow *(Example)* |
|---|---|---|
| C1 | Financial accounting net income or loss (after tax) | 7.79 |
| C2 | Add back net taxes expense | 0.91 |
| C3 | Other GloBE adjustments (net): policy disallowed expenses and stock-based compensation difference | 0.40 |
| C4 | Net GloBE income (C1 + C2 + C3) | 9.10 |
| C5 | Adjusted covered taxes | 0.91 |
| C6 | Jurisdictional ETR (C5 / C4) | 10.0% |
| C7 | Top-up tax percentage (15% minus C6) | 5.0% |
| C8 | SBIE (section 4.3) | 8.896 |
| C9 | Excess profit (C4 minus C8, not below zero) | 0.204 |
| C10 | Top-up tax before QDMTT (C7 x C9) | 0.010 |
| C11 | QDMTT payable in Vietnam if the TCSH were not available | 0.010 |
| C12 | Residual top-up tax under the Dutch IIR (C10 minus C11) | 0.000 |

*Example:* 7.79 + 0.91 + 0.40 = 9.10; 0.91 / 9.10 = 10.0%; 9.10 -
8.896 = 0.204; 5.0% x 0.204 = 0.0102, about EUR 10k. Because Vietnam
passes the TCSH routine profits test for FY2025, its top-up tax is
deemed zero and nothing is payable; the shadow figure is the fallback
if the safe harbour is lost (for example if the CbC report turned out
not to be qualified). It also shows why the CbC test and the full
computation can differ: the GloBE adjustments in C3 raise the income
compared with CbC profit before tax. If the safe harbour is lost and the
Vietnamese QDMTT is listed as qualifying for the QDMTT safe harbour, the
Dutch IIR top-up tax for Vietnam is deemed zero without a second
computation; if it is not listed, the group computes under the Dutch IIR
and credits the QDMTT. Vietnam also fails the GloBE de minimis exclusion
because average GloBE revenue is above EUR 10m.

From FY2026, review whether the Substance-based Tax Incentive Safe
Harbour changes the result. A reduced statutory rate is not the same as
an expenditure-based incentive, so the preliminary view for Vietnam is
that the safe harbour gives no relief (*Example*); confirm with the
current Administrative Guidance and a local adviser. The size of the
exposure if every safe harbour is lost can be estimated from the
shadow computation: at a 10% rate the top-up tax percentage is about
5%, applied to profit above the SBIE.

## 6. GIR content and filing approach

<!-- Guidance: Purpose: decide who files what, where and when. Questions: Which entity is the designated filing entity? Does each jurisdiction accept central filing plus local notification? What are the local notification deadlines? Pitfall: missing local notification deadlines, which often fall earlier than the GIR deadline. -->

The GloBE Information Return is a standard return developed by the
Inclusive Framework. It has a general section on the group and the
filing entity, a corporate structure section, a summary of results by
jurisdiction, and detailed jurisdictional sections covering safe
harbour elections, ETR computations, top-up tax and its allocation.
Check the current GIR version and XML schema published by the OECD and
the local version adopted by each jurisdiction before building the
filing.

The GIR is due no later than 15 months after the end of the fiscal year,
extended to 18 months for the first year. For calendar-year groups in
scope for FY2024, the first GIR was due on 2026-06-30. Within the EU,
Directive 2022/2523 Article 44 sets the filing obligation, and Directive
2025/872 (DAC9, adopted 2025-04-14) lets the designated filing entity
file centrally with one Member State, which then exchanges the relevant
parts with the others. Commission Implementing Regulation (EU) 2025/1325
sets the exchange forms and formats.

| Filing ID | Jurisdiction | Filing type | Filed by | Notification deadline | GIR or return deadline | Status |
|---|---|---|---|---|---|---|
| FIL-001 *(Example)* | Netherlands | Central GIR (designated filing entity) | CE-001 | Per Dutch law (check) | 2027-06-30 | Planned |
| FIL-002 *(Example)* | Germany | Notification of filing entity; DAC9 exchange | CE-002 | Per German law (check) | Exchanged | Planned |
| FIL-003 *(Example)* | United Kingdom | Registration; notification of filing member | CE-003 | Per HMRC guidance (check) | Exchanged or local | Planned |
| FIL-004 *(Example)* | Vietnam | Local GIR and QDMTT return | CE-005 | Per Vietnamese law (check) | Per local law (check) | Planned |
| FIL-005 *(Example)* | United States | None (no Pillar Two law) | Not applicable | Not applicable | Not applicable | Not applicable |

Keep a filing log with submission references, the XML file hash, the
schema version used and acknowledgement receipts. Domestic QDMTT returns
are separate from the GIR in many jurisdictions and can have their own
earlier deadlines and payment dates.

## 7. Systems, controls and XML schema

<!-- Guidance: Purpose: make the computation repeatable and auditable. Questions: Where does the GloBE engine sit (tax provision tool, consolidation system, spreadsheet, vendor engine)? How are data loads reconciled? Who signs off adjustments? Pitfall: a spreadsheet that one person understands, with no reconciliation to the consolidation. -->

| Control ID | Control | Frequency | Owner | Evidence |
|---|---|---|---|---|
| P2C-001 *(Example)* | Reconcile entity list to legal entity register and CbC Table 2 | Annual | [@tax-reporting] | Signed reconciliation |
| P2C-002 *(Example)* | Reconcile financial accounting net income per entity to the consolidation ledger | Annual and at each provision cycle | [@group-reporting] | Tie-out report |
| P2C-003 *(Example)* | Review GloBE adjustments above EUR [0.5]m | Annual | [@head-of-tax] | Review notes |
| P2C-004 *(Example)* | Validate XML against the current schema before submission | Each filing | [@tax-technology] | Validator log |
| P2C-005 *(Example)* | Monitor jurisdiction status and Central Record changes | Quarterly | [@tax-policy] | Status table dated |
| P2C-006 *(Example)* | Approve safe harbour elections | Annual | [@cfo] | Approval record |

Choose the calculation engine after mapping the data. Small groups often
use a controlled spreadsheet for a few years, but the GIR's XML format
and the number of data points push most groups to a tool linked to the
consolidation system. Whatever the tool, version it, lock formulas,
document every manual override, and keep the inputs and outputs for at
least the local record retention period. Treat the Pillar Two
computation as a key report in the internal control framework, because
it drives a tax liability and a financial statement disclosure.

## 8. Deferred tax, provision and disclosure impacts

<!-- Guidance: Purpose: connect Pillar Two to the year-end tax note. Questions: Has the group applied the mandatory exception from deferred tax for Pillar Two? Is current top-up tax recognised in the right entity? What disclosure is required for exposure in jurisdictions with enacted but not yet effective law? Pitfall: recording QDMTT in the parent instead of the entity that is liable. -->

Under IFRS, IAS 12 as amended in May 2023 (International Tax Reform:
Pillar Two Model Rules) gives a mandatory temporary exception from
recognising and disclosing deferred tax related to Pillar Two income
taxes (paragraph 4A) and requires specific disclosures (paragraphs 88A
to 88D). Under US GAAP, ASC 740 applies; groups generally treat top-up
taxes as period costs rather than remeasuring deferred taxes. Obtain the
standards for the normative text and agree the policy with the auditor.

| Impact ID | Area | Effect for FY2025 | Entity | Owner |
|---|---|---|---|---|
| IMP-001 *(Example)* | Current tax | No top-up tax for FY2025: Vietnam passes the TCSH routine profits test; shadow exposure of EUR 0.010m noted in the provision file, not recognised | CE-005 Vietnam | [@tax-reporting] |
| IMP-002 *(Example)* | Deferred tax | Exception applied; no deferred tax for Pillar Two | All | [@tax-reporting] |
| IMP-003 *(Example)* | Disclosure | Statement that the exception is applied; current tax related to Pillar Two shown separately | Group | [@group-reporting] |
| IMP-004 *(Example)* | Interim reporting | Reassess the Vietnam routine profits margin at each quarter; include any expected annual QDMTT in the estimated annual ETR | Group | [@tax-reporting] |
| IMP-005 *(Example)* | ETR reconciliation | Pillar Two line kept in the reconciliation (zero in FY2025 and FY2026); a QDMTT, if any, shown as a separate reconciling item | Group | [@tax-reporting] |

The provision process must collect Pillar Two estimates at each
reporting date, including interim periods, because the top-up tax is a
current tax of the year. Link the numbers in this section to the
Income Tax Provision (`finance/income-tax-provision`), where the FY2026
Pillar Two result (zero, Vietnam passing the routine profits test by EUR
0.06m) is documented in section 8.

## 9. Timeline and owners

<!-- Guidance: Purpose: make the plan executable. Questions: What must be done by when to meet each notification and filing deadline? Who is accountable? Pitfall: planning backwards from the GIR deadline only and missing the earlier QDMTT payment and notification dates. -->

```mermaid
gantt
  title Pillar Two FY2025 readiness plan (Example)
  dateFormat YYYY-MM-DD
  section Data
  Close data gaps DAT-003 to DAT-010 :a1, 2026-11-01, 2027-01-31
  section Computation
  FY2025 safe harbour tests       :a2, 2026-11-15, 2026-12-31
  Vietnam shadow computation      :a3, 2027-01-15, 2027-03-15
  section Filing
  Local notifications             :a4, 2027-01-15, 2027-04-30
  Central GIR XML build and review :a5, 2027-03-01, 2027-05-31
  GIR submission                  :milestone, m1, 2027-06-15, 0d
```

| Action ID | Action | Owner | Due | Status |
|---|---|---|---|---|
| ACT-001 *(Example)* | Tag equity gains and losses in the investment ledger (DAT-003) | [@group-reporting] | 2026-12-31 | Open |
| ACT-002 *(Example)* | Create cost codes for policy disallowed expenses (DAT-004) | [@legal-finance] | 2026-12-31 | Open |
| ACT-003 *(Example)* | Split contractor costs from eligible payroll (DAT-008) | [@payroll] | 2027-01-31 | Open |
| ACT-004 *(Example)* | Confirm Vietnam QDMTT return form and deadline with local adviser | [@vn-finance-lead] | 2026-12-15 | Open |
| ACT-005 *(Example)* | Select GloBE engine and XML tool | [@tax-technology] | 2027-01-31 | Open |
| ACT-006 *(Example)* | Board briefing on Pillar Two exposure and tax strategy wording | [@head-of-tax] | 2027-02-28 | Open |

Review the plan monthly in the tax steering meeting. Move an action to
"Done" only with evidence attached, and record any change of deadline in
the revision history.

## 10. Risks, issues and open questions

<!-- Guidance: Purpose: show the residual risk to the CFO and audit committee. Questions: What could lead to a wrong or late filing, a penalty or a financial statement misstatement? What is still uncertain in law? Pitfall: listing generic risks without an owner, a rating and a response. -->

| Risk ID | Risk | Likelihood | Impact | Response | Owner |
|---|---|---|---|---|---|
| P2R-001 *(Example)* | Vietnamese QDMTT guidance or filing form changes late in the cycle | Medium | Medium | Local adviser on retainer; monitor official gazette monthly | [@vn-finance-lead] |
| P2R-002 *(Example)* | Safe harbour margin below 2 points in a jurisdiction as the transition rate rises to 17% | Low | High | Alert level 2 points; run full computation as backup | [@head-of-tax] |
| P2R-006 *(Example)* | Vietnam routine profits margin (EUR 0.20m in FY2025, EUR 0.06m in FY2026) turns negative as carve-out rates fall or the development fee rises | High | Medium | Forecast the margin at each budget; keep the shadow computation; exposure about 5% of the excess profit | [@head-of-tax] |
| P2R-003 *(Example)* | Data gaps not closed before the computation window | Medium | High | Monthly tracking of ACT-001 to ACT-003 | [@group-financial-controller] |
| P2R-004 *(Example)* | A jurisdiction does not accept the central filing understanding | Medium | Medium | Prepare local filing as contingency | [@tax-reporting] |
| P2R-005 *(Example)* | Acquisition or disposal changes the threshold test or entity list | Low | Medium | M&A checklist includes Pillar Two step | [@head-of-tax] |

Open questions to resolve with advisers: the local filing route in each
jurisdiction that has not joined the central filing understanding; the
treatment of any new incentive under the Substance-based Tax Incentive
Safe Harbour; whether the Simplified ETR Safe Harbour will be available
early (from fiscal years beginning on or after 2025-12-31) in every
jurisdiction with taxing rights; and the effect of any change in the
OECD Central Record on side-by-side status for groups with a parent in
a listed jurisdiction.

## 11. Glossary and references

<!-- Guidance: Keep the glossary short and consistent with the GIR terms used in section 6. Record the version and date of every source used, because Administrative Guidance is issued several times a year. -->

### 11.1 Glossary

| Term | Meaning in this template |
|---|---|
| Constituent entity | An entity or permanent establishment included in the group for GloBE purposes |
| Covered taxes | Taxes on income or profits and equivalent taxes counted in the GloBE ETR |
| GIR | GloBE Information Return, the standard return for the group |
| GloBE income or loss | Financial accounting net income or loss of a constituent entity after the GloBE adjustments |
| IIR | Income inclusion rule, collected in the parent jurisdiction |
| QDMTT | Qualified domestic minimum top-up tax, collected in the source jurisdiction |
| SBIE | Substance-based income exclusion based on payroll and tangible assets |
| Side-by-side safe harbour | Election that switches off the IIR and UTPR for groups whose UPE is in a qualified jurisdiction |
| TCSH | Transitional CbCR Safe Harbour |
| Top-up tax | Tax that lifts the jurisdictional ETR to 15% on excess profit |
| UPE | Ultimate parent entity |
| UTPR | Undertaxed profits rule, the backstop collected in other group jurisdictions |

### 11.2 References

| Reference | Version or date checked | Use |
|---|---|---|
| OECD, Global Anti-Base Erosion Model Rules (Pillar Two) | Published 2021-12-20 | Article numbers cited; no text reproduced |
| OECD, Administrative Guidance on the GloBE Rules (consolidated and later releases) | Releases to 2026-05-18, checked 2026-10-25 | Safe harbour and GIR concepts, own wording |
| OECD, Side-by-Side Package (CC BY 4.0) | Approved by the Inclusive Framework 2026-01-05 | Safe harbour dates and transition rates |
| OECD, GloBE Information Return and XML schema | Current version on oecd.org (check) | Section 6 structure |
| Council Directive (EU) 2022/2523 | Adopted 2022-12-14, transposition by 2023-12-31 | EU scope, Article 44 filing, Article 50 option |
| Council Directive (EU) 2025/872 (DAC9) | Adopted 2025-04-14 | Central filing and exchange in the EU |
| Vietnam Resolution 107/2023/QH15 and Decree 236/2025/ND-CP | Decree issued 2025-08-29, effective 2025-10-15, applies from FY2024 (adviser summaries; official text not opened, check) | Vietnam QDMTT, IIR and transitional CbCR safe harbour (Article 11) |
| Commission Implementing Regulation (EU) 2025/1325 | 2025-07-07 | Exchange forms and formats |
| IAS 12 Income Taxes, amendments of May 2023 | Paragraphs 4A, 88A to 88D, names only | Section 8 |
| ASC 740 Income Taxes | Topic number only | Section 8 |

## Standard and licence note

Based on the OECD Global Anti-Base Erosion Model Rules (Pillar Two),
the related Administrative Guidance and the Side-by-Side Package
(OECD, 2026, licensed under CC BY 4.0), and on Council Directive (EU)
2022/2523 and Council Directive (EU) 2025/872 (EUR-Lex, reuse with
acknowledgement). This is an adaptation of original works by the OECD:
the opinions expressed and arguments employed in this adaptation should
not be reported as representing the official views of the OECD or of
its Member countries, and the OECD does not endorse this template. IAS
12 and ASC 740 are cited by name and paragraph or topic number only; no
text from IFRS Foundation or FASB material is reproduced. The template
text is original. Ostrander Group N.V. and every figure are fictional.
Check the current official versions of the Model Rules, Administrative
Guidance, GIR, Central Record and each domestic law before use.
Template licence: MIT.