Pillar Two Terms Deck Flashcards
BEPS
Base Erosion and Profit Shifting - Strategies used by multinational companies to shift profits from high-tax jurisdictions to low-tax jurisdictions.
OECD
Organisation for Economic Co-operation and Development - An international organization that works to build better policies for better lives.
Pillar Two
A component of the OECD’s BEPS initiative that introduces a global minimum tax rate to ensure that multinational enterprises pay a minimum level of tax.
GloBE
Global Anti-Base Erosion - The rules under Pillar Two that establish the global minimum tax.
IIR
Income Inclusion Rule - A rule that requires the parent entity of a multinational group to pay top-up tax on the income of its low-taxed subsidiaries.
UTPR
Undertaxed Payments Rule - A rule that denies deductions or requires an equivalent adjustment for payments made to related parties that are subject to low tax.
STTR
Subject to Tax Rule - A rule that allows source jurisdictions to impose a top-up tax on certain related-party payments that are subject to tax below a minimum rate.
ETR
Effective Tax Rate - The actual rate at which an entity’s income is taxed, calculated as the total tax paid divided by the total income.
MNE
Multinational Enterprise - A company that operates in multiple countries.
Top-up Tax
Additional tax imposed to bring the total tax on an entity’s income up to the minimum rate established by the GloBE rules.
GILTI
Global Intangible Low-Taxed Income - A U.S. tax provision aimed at reducing the incentive to shift profits to low-tax jurisdictions.
CFC
Controlled Foreign Corporation - A foreign corporation in which more than 50% of the vote or value is owned by U.S. shareholders.
BEAT
Base Erosion and Anti-Abuse Tax - A U.S. tax aimed at preventing companies from eroding the U.S. tax base by making deductible payments to foreign affiliates.
GILTI High-Tax Exclusion
An exclusion that allows certain high-taxed income to be excluded from GILTI.
Qualified Domestic Minimum Top-up Tax (QDMTT)
A domestic minimum tax that ensures income earned in a jurisdiction is subject to at least the minimum rate of tax.
GILTI High-Tax Exclusion
An exclusion that allows certain high-taxed income to be excluded from GILTI.
QDMTT
Qualified Domestic Minimum Top-up Tax - A domestic minimum tax that ensures income earned in a jurisdiction is subject to at least the minimum rate of tax.
CbCR
Country-by-Country Reporting - A reporting requirement for large multinational enterprises to provide a breakdown of their revenue, profits, and taxes paid in each country they operate.
GILTI
Global Intangible Low-Taxed Income - A U.S. tax provision aimed at reducing the incentive to shift profits to low-tax jurisdictions.
CFC
Controlled Foreign Corporation - A foreign corporation in which more than 50% of the vote or value is owned by U.S. shareholders.
BEAT
Base Erosion and Anti-Abuse Tax - A U.S. tax aimed at preventing companies from eroding the U.S. tax base by making deductible payments to foreign affiliates.
GILTI High-Tax Exclusion
An exclusion that allows certain high-taxed income to be excluded from GILTI.
QDMTT
Qualified Domestic Minimum Top-up Tax - A domestic minimum tax that ensures income earned in a jurisdiction is subject to at least the minimum rate of tax.
CbCR
Country-by-Country Reporting - A reporting requirement for large multinational enterprises to provide a breakdown of their revenue, profits, and taxes paid in each country they operate.
GILTI
Global Intangible Low-Taxed Income - A U.S. tax provision aimed at reducing the incentive to shift profits to low-tax jurisdictions.
CFC
Controlled Foreign Corporation - A foreign corporation in which more than 50% of the vote or value is owned by U.S. shareholders.
BEAT
Base Erosion and Anti-Abuse Tax - A U.S. tax aimed at preventing companies from eroding the U.S. tax base by making deductible payments to foreign affiliates.
GILTI High-Tax Exclusion
An exclusion that allows certain high-taxed income to be excluded from GILTI.
QDMTT
Qualified Domestic Minimum Top-up Tax - A domestic minimum tax that ensures income earned in a jurisdiction is subject to at least the minimum rate of tax.
