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The OECD Inclusive Framework released updated Pillar 2 materials on Sept. 11, including a revised GloBE Information Return (GIR), administrative guidance addressing explicitly conditional taxes and mismatched fiscal periods, and the Terms of Reference and Assessment Methodology for the Full Legislative Review.
The package builds on the January 2026 side-by-side (SbS) agreement and provides further detail on reporting and the application of the global minimum tax.
Updated GIR and forthcoming XML schema
The revised GIR incorporates reporting for the SbS, ultimate parent entity (UPE), simplified effective tax rate (ETR) and substance-based tax incentive safe harbors. It applies to fiscal years beginning on or after Dec. 31, 2025.
Groups electing the SbS safe harbor will report that election and benefit from reduced corporate-structure disclosures and the removal of the high-level summary table. The simplified ETR and substance-based tax incentive safe harbors introduce supporting disclosures covering calculations, adjustments and elections. Simplified calculations, therefore, continue to require supporting information.
A revised XML schema, which provides the technical format for filing and exchanging GIR information, has not yet been released but is expected shortly. Its use will begin on a cutoff date that the OECD has not yet specified and will extend to amendments and corrections submitted thereafter. Certain new explanatory notes concerning existing GIR data points also apply to returns for earlier fiscal years.
Grant Thornton insight:
The revised GIR provides a clearer picture of compliance following the SbS agreement. For U.S. multinational groups, the relief does not eliminate qualified domestic minimum top-up taxes (QDMTTs) or all GIR reporting obligations. Tax departments should review data requests, election documentation and reporting systems while monitoring the forthcoming XML specifications and local implementation.
Explicitly conditional taxes
The administrative guidance excludes explicitly conditional taxes from covered taxes. Broadly, these are taxes whose application expressly depends on a constituent entity being subject to another jurisdiction’s qualified income inclusion rule (IIR) or undertaxed profits rule (UTPR).
A separate, severable conditional surcharge is excluded without disqualifying the underlying generally applicable tax. Where the conditional feature cannot be separated, the entire tax is excluded. A consolidated-revenue threshold alone does not make a tax explicitly conditional.
Excluded taxes are also not added back to financial accounting income through the net taxes expense adjustment. Limited relief applies to pre-2025 fiscal years when the condition was enacted before Nov. 30, 2024, and removed for fiscal years beginning on or after Jan. 1, 2025. Conditional domestic minimum taxes generally cannot qualify as QDMTTs, subject to a specified 2024 exception.
The practical consequence is that an affected local tax payment may not reduce Pillar 2 exposure as expected. With the IIR and UTPR now in force across most implementing jurisdictions, few in-scope groups sit outside those rules other than those relying on the SbS safe harbor. As a result, a condition of this kind is most likely to distinguish SbS groups from the rest. Further OECD guidance addressing other discriminatory tax features is expected by year-end.
Mismatched fiscal periods
The guidance also clarifies when local accounting standards and the QDMTT safe harbor remain available despite fiscal-period differences. Where a required QDMTT period differs from the period used in consolidation, the safe harbor generally must apply to each relevant QDMTT period beginning or ending within the parent’s fiscal year. Special 2024 relief continues to require separate consideration, as does the existing switch-off rule, under which the QDMTT safe harbor is unavailable for a jurisdiction in specified circumstances, leaving the group to compute any top-up tax for that jurisdiction under the GloBE rules.
Framework for full legislative reviews
The package also includes the Terms of Reference and the Assessment Methodology for the Full Legislative Review, the peer review process that will replace self-assessment in determining whether a jurisdiction’s IIR, UTPR and QDMTT legislation is qualified. Jurisdictions whose rules took effect on or before April 1, 2025, generally have a transitional three-year period to initiate the review. Qualification status matters because it drives QDMTT safe harbor reliance.
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