C0 – Safe Harbour Check | Lucanet Knowledge Base

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C0 – Safe Harbour Check

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Glossary

The Safe Harbour Check workspace includes the three transitional safe harbour tests:

Simplified ETR test

De minimis test

Routine profits tests

These tests are followed by information on the applicability of the transitional safe harbour.

For the safe harbour check, entity data is aggregated on a jurisdictional level based on the reporting dimension type selected for the CbCR-Safe Harbour Blending.

The C0 – Safe Harbour Check workspace can be found at Pillar 2 | Calculation | C0 – Safe Harbour Check. The workspace is displayed as follows, for example:

Specify the following per section:

Qualified CbCR Profit (Loss) before Income Tax

Displays the aggregate of the CbCR-2 values for the jurisdiction or subgroup.

Income Tax Expense (including uncertain tax positions)

Displays the aggregate of the CbCR-3.1 values for the jurisdiction or subgroup.

Income Tax Expense related to uncertain tax positions

Displays the aggregate of the CbCR-3.2 values for the jurisdiction or subgroup.

Income Tax Expense (after eliminating uncertain tax positions)

Displays the aggregate income tax expense after eliminating uncertain tax positions, based on the following calculation: {1.3} - {1.4}.

Simplified ETR

Displays the aggregate simplified ETR by dividing the income tax by the qualified CbCR profit or loss before income tax: {1.5} / {1.1} * 100.

Transition Rate

Displays the transition rate of 15%.

Simplified ETR Test successful?

Indicates whether or not the simplified ETR test is successful.

Qualified CbCR Revenue

Displays the aggregate of the CbCR-1 values for the jurisdiction or subgroup.

Average GloBE Revenue threshold

Displays the GloBE revenue threshold (€ 10,000,000).

Qualified CbCR Profit (Loss) before Income Tax

Displays the aggregate of the CbCR-2 values for the jurisdiction or subgroup.

Average GloBE Income threshold

Displays the fixed GloBE income threshold (€ 1,000,000).

De Minimis Test successful?

Indicates if the de minimis test is successful.

Qualified CbCR Profit (Loss) before Income Tax

Displays the aggregate of the CbCR-2 values for the jurisdiction or subgroup.

Relevant Eligible Payroll Costs of Eligible Employees performing activities in the jurisdiction

Displays the aggregate of the CO-1.1 values for the jurisdiction or subgroup.

Allocations of Eligible Payroll Costs in case of Permanent Establishments or Flow-Through Entities

Displays the payroll cost allocations applicable to permanent establishments or flow-through entities in the jurisdiction.

Application of relevant mark-up percentage for the Reporting Fiscal Year

Displays the relevant mark-up percentage for the reporting year, e.g. 9.8% for 2024.

Payroll Carve-Out Amount

Displays the aggregate amount of eligible payroll costs for the jurisdiction or subgroup multiplied by the relevant mark-up percentage.

Value of relevant Eligible Tangible Assets located in the jurisdiction at the beginning of the reporting year

Displays the aggregate of the CO-2.1 values for the jurisdiction or subgroup.

Value of relevant Eligible Tangible Assets located in the jurisdiction at the end of the reporting year

Displays the aggregate of the CO-2.2 values for the jurisdiction or subgroup.

Allocations of Eligible Tangible Assets in case of Permanent Establishments or Flow-Through Entities

Displays the tangible asset allocations applicable to permanent establishments or flow-through entities in the jurisdiction.

Carrying value of relevant Eligible Tangible Assets located in the jurisdiction

Displays the arithmetic mean of the values in lines 3.5 and 3.5b above.

Application of relevant mark-up percentage for the Reporting Fiscal Year

Displays the relevant mark-up percentage for the reporting year, e.g. 7.8% for 2024.

Tangible Assets Carve-Out Amount

Displays the carrying value of relevant eligible tangible assets multiplied by the relevant mark-up percentage.

Total amount of the Substance-Based Income Exclusion

Displays the sum of the payroll carve-out amount and the tangible assets carve-out amount.

Routine Profits Test successful?

Indicates whether or not the routine profits test is successful.

Option	Description
4	Is the Transitional CbCR safe harbour generally available for the Reporting Fiscal Year?
5	Was the election to use the Transitional CbCR safe harbour exercised in the previous Reporting Fiscal Year?
6	Which Safe Harbour Election is exercised for the jurisdiction or joint venture group?
7	Is the elected Safe Harbour successful?
8	Result: Will the Transitional CbCR safe harbour be applied for the Reporting Fiscal Year?