The GloBE rules operate as a common approach. This means that members of the Inclusive Framework have decided that it is not necessary for jurisdictions to adopt the GloBE rules but have agreed, that if a jurisdiction chooses to do so, it must implement and administer them in a way that is consistent with the outcomes provided under the GloBE rules including the agreed rule order. Even if they do not implement the rules, agreement on a common approach means that one jurisdiction accepts the application of the GloBE rules by another in respect of MNEs operating in its jurisdiction.

Consistent domestic implementation of parallel rules will result in transparent and predictable outcomes across jurisdictions, with resulting benefits for taxpayers and tax administrations alike. As jurisdictions move forward with the implementation, they will ensure that their domestic rules are implemented and administered in line with the common approach by providing mutual assistance and reviewing each other’s implementation of the GloBE rules.

The GloBE Model Rules set out the detailed terms of the global minimum tax. They are complemented by a Commentary and Administrative Guidance that is incorporated into the Commentary from time to time. The GloBE rules are drafted in the form of a legislative template which an implementing jurisdiction can introduce into domestic law. The rules define the MNE Groups within the scope of the rules and the methodology to be applied in calculating their jurisdictional ETR and any resulting top-up taxes. 

The rules are designed to accommodate a diverse range of MNE Groups and different tax systems, including different tax consolidation, income allocation and entity classification rules that may not be equally relevant for all jurisdictions. The core provisions of the rules are supplemented with more detailed rules that address the treatment of particular structures, transactions and tax regimes, where again the relevance of these aspects will depend on the circumstances of an implementing jurisdiction.

Since the approval and public release of the GloBE Model Rules by the Inclusive Framework, many jurisdictions have taken steps towards the implementation of these rules into their domestic law, with the global minimum tax starting to apply from the beginning of 2024 with the introduction of the Income Inclusion Rule (IIR). Many jurisdictions have also announced plans to introduce Qualified Domestic Minimum Top-up Tax (QDMTT). The UTPR is not expected to take effect before 2025.