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Glossary

The NMCE Safe Harbour workspace provides a simplified compliance option for Non-Material Constituent Entities (NMCEs). This safe harbour allows qualifying constituent entities (CEs) to be excluded from the full-scope Pillar 2 calculations ( C2 – CE Calculations, C4 – Jurisdictional Blending, and C5 – Top-up Tax Allocation) while still being included in the initial safe harbour assessments.

The NMCE Safe Harbour includes three alternative tests that CEs can use to demonstrate they meet materiality thresholds:

Simplified ETR Test

De Minimis Test

Routine Profits Test

If at least one of these tests is successful, the CE may elect to use the NMCE Safe Harbour through the Entity Election EE-1 in the Entity Election and General Information workspace.

Notes:

Only CEs that have been marked as

non-material

in the master data can use the NMCE Safe Harbour. You can verify this setting by navigating to

Master Data | Companies

and selecting your CE to access the detail view. On the

International Tax

tab, check whether

AMAE50

is activated.

Stateless CEs

are

not eligible

for the NMCE Safe Harbour and are excluded from these calculations. You can verify this setting by navigating to

Master Data | Companies

and selecting your CE to access the detail view. On the

International Tax

tab, check whether

AMAE52

is activated.

For the NMCE Safe Harbour, CE data is aggregated on a jurisdictional level based on the

reporting dimension type

selected for blending.

The C1 – NMCE Safe Harbour workspace can be found at Pillar 2 | Calculation | C1 – NMCE Safe Harbour and is displayed as follows:

To access this workspace and display the desired values:

Select a snapshot in the Home workspace.

Navigate to C1 – NMCE Safe Harbour.

Select the jurisdiction or subgroup you want to review from the Jurisdiction drop-down list.

The NMCE Safe Harbour check aggregates data from all constituent entities within a jurisdiction that are marked as non-material and are not stateless entities (see also Overview).

NMCE Safe Harbour displays the results of three tests. If any of the tests is successful, the NMCE Safe Harbour is available for that jurisdiction or subgroup.

The Simplified ETR Test compares the effective tax rate against the minimum rate of 15%.

Option	Description
NM-1.1 Qualified CbCR Revenue	Displays the aggregate of qualified CbCR revenue for all non-material entities in the jurisdiction or subgroup. This value is based on CbCR-1 from the CbCR Safe Harbour workspace in the Entity Data Collection.
NM-1.2 Income Tax Expense accrued	Displays the aggregate of income tax expense accrued for all non-material entities in the jurisdiction or subgroup. This value is based on CbCR-4 from the CbCR Safe Harbour workspace (see OECD-Standard).
NM-1.3 Simplified ETR	Displays the simplified effective tax rate calculated as: {NM-1.2} / {NM-1.1} × 100.
NM-1.4 Transition Rate	Displays the minimum transition rate of 15%.
NM-1.5 Simplified ETR Test successful?	Indicates whether the Simplified ETR Test is successful. The test is successful if the Simplified ETR(NM-1.3) is equal to or greater than the Transition Rate(NM-1.4).

The De Minimis Test verifies whether GloBE Revenue stays below specified thresholds across multiple fiscal years.

Displays the aggregate GloBE Revenue for the reporting fiscal year for all non-material entities in the jurisdiction or subgroup.

Displays the GloBE Revenue from the first preceding fiscal year, if available. This value is retrieved from the prior period snapshot.

Displays the GloBE Revenue from the second preceding fiscal year, if available. This value is retrieved from snapshots from two periods prior.

Indicates which fiscal years are not available for the calculation (e.g., if this is the first or second year of reporting, prior fiscal year data may not exist).

Displays the average GloBE Revenue calculated across all available fiscal years. The calculation considers only the fiscal years for which data is available.

Displays the threshold for average GloBE Revenue. The standard threshold is € 10,000,000.

Indicates whether the De Minimis Test is successful. The test is successful if the average GloBE Revenue (NM-2.5) is below the threshold (NM-2.6) and the average GloBE Income is below € 1,000,000.

A checkbox is displayed if the test is successful.

The Routine Profits Test calculates the Substance-Based Income Exclusion by evaluating payroll costs and tangible assets, applying the relevant carve-out percentages.

Displays the aggregate of qualified CbCR revenue for all non-material entities in the jurisdiction or subgroup. This value is based on CbCR-1 from the CbCR Safe Harbour workspace in the OECD-Standard folder.

Displays the aggregate of eligible payroll costs for employees performing activities in the jurisdiction for all non-material entities. This value is based on CO-1.1 from the Substance-based Income Exclusion workspace in the OECD-Standard folder.

Displays the aggregate of payroll cost allocations for permanent establishments or flow-through entities for all non-material entities. These allocations are made in the FTE & PE Allocations workspace.

Displays the relevant mark-up percentage for payroll costs for the reporting fiscal year.

Displays the payroll carve-out amount calculated by multiplying the sum of eligible payroll costs and allocations by the relevant mark-up percentage: ({NM-3.2} + {NM-3.3}) × {NM-3.4}.

Displays the aggregate value of eligible tangible assets at the beginning of the reporting year for all non-material entities. This value is based on CO-2.1 from the Substance-based Income Exclusion workspace in the OECD-Standard folder.

Note: This value uses the exchange rates from the prior period.

Displays the aggregate value of eligible tangible assets at the end of the reporting year for all non-material entities. This value is based on CO-2.2 from the Substance-based Income Exclusion workspace in the OECD-Standard folder.

Displays the arithmetic mean of the tangible asset values at the beginning and end of the reporting year: ({NM-3.6} + {NM-3.7}) / 2.

Displays the aggregate of tangible asset allocations for permanent establishments or flow-through entities for all non-material entities. These allocations are made in the FTE & PE Allocations workspace.

Displays the relevant mark-up percentage for tangible assets for the reporting fiscal year.

Displays the tangible assets carve-out amount calculated by multiplying the sum of the carrying value of tangible assets and allocations by the relevant mark-up percentage: ({NM-3.8} + {NM-3.9}) × {NM-3.10}.

Displays the total substance-based income exclusion, calculated as the sum of the payroll carve-out amount and the tangible assets carve-out amount: {NM-3.5} + {NM-3.11}.

Indicates whether the Routine Profits Test is successful. The test is successful based on comparing the substance-based income exclusion (NM-3.12) against the qualified CbCR revenue and relevant income thresholds.

A checkbox is displayed if the test is successful.

NM-4 displays whether at least one of the three tests (Simplified ETR, De Minimis, or Routine Profits) is successful.

If this field displays a positive result, i.e. the checkbox is activated, the constituent entities in this jurisdiction or subgroup are eligible to elect the NMCE Safe Harbour (see also EE-1 in the Entity Election and General Information workspace of the OECD-Standard folder).

The NMCE Safe Harbour check determines eligibility for the NMCE safe harbour, but it does not automatically exclude CEs from the full-scope calculations. To actually apply the NMCE Safe Harbour, do the following:

Check that at least one test in C1 – NMCE Safe Harbour is successful, i.e. NM-4 displays positive result.

Activate the EE-1 checkbox under Entity Data Collection | OECD-Standard | Entity Election and General Information workspace for each constituent entity.

Create a new snapshot to apply the following exclusion from:

C2 – CE Calculations

C4 – Jurisdictional Blending (for most values)

C5 – Top-up Tax Allocation

If EE-1 is activated but none of the tests were successful in the corresponding jurisdiction or subgroup in C1 – NMCE Safe Harbour, the NMCE Safe Harbour is not applicable for the CE.

Last updated on May 1, 2026

Overview

Navigation

Performing the NMCE Safe Harbour Check

Relationship to Entity Elections

C1 – NMCE Safe Harbour

Overview

Navigation

Performing the NMCE Safe Harbour Check

Simplified ETR Test

De Minimis Test

NM-2.1 GloBE Revenue - Reporting Fiscal Year

NM-2.2 GloBE Revenue - 1st preceding Fiscal Year (if applicable)

NM-2.3 GloBE Revenue - 2nd preceding Fiscal Year (if applicable)

NM-2.4 FY not available

NM-2.5 GloBE Revenue - Average of the available Fiscal Years

NM-2.6 Average GloBE Revenue threshold

NM-2.7 De Minimis Test successful?

Routine Profits Test

NM-3.1 Qualified CbCR Revenue

NM-3.2 Relevant Eligible Payroll Costs of Eligible Employees performing activities in the jurisdiction

NM-3.3 Allocations of Eligible Payroll Costs in case of Permanent Establishments or Flow-Through Entities

NM-3.4 Application of relevant mark-up percentage for the Reporting Fiscal Year

NM-3.5 Payroll Carve-Out Amount

NM-3.6 Value of relevant Eligible Tangible Assets located in the jurisdiction at the beginning of the reporting year

NM-3.7 Value of relevant Eligible Tangible Assets located in the jurisdiction at the end of the reporting year

NM-3.8 Carrying value of relevant Eligible Tangible Assets located in the jurisdiction

NM-3.9 Allocations of Eligible Tangible Assets in case of Permanent Establishments or Flow-Through Entities

NM-3.10 Application of relevant mark-up percentage for the Reporting Fiscal Year

NM-3.11 Tangible Assets Carve-Out Amount

NM-3.12 Total amount of the Substance Based Income Exclusion

NM-3.13 Routine Profits Test successful?

Result

Relationship to Entity Elections

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