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C5 – Top-up Tax Allocation

Overview

In the Tax Compliance & Reporting solution, the C5 – Top-up Tax Allocation workspace displays the top-up tax payable by low-taxed CEs and members of joint venture groups.

The tax is calculated by distributing the top-up tax amount per jurisdiction or subgroup to the low-taxed CEs with a positive GloBE income based on their share of the total GloBE income in that jurisdiction or subgroup.

If a CE qualifies for the NMCE Safe Harbour, i.e. the NMCE Safe Harbour Check was successful and EE-1 has been activated for the CE (see Entity Election and General Information workspace in the OECD-Standard folder), the CE is excluded from the workspace.

The C5 – Top-up Tax Allocation workspace can be found at Pillar 2 | Calculation | C5 – Top-up Tax Allocation and is displayed as follows:

The 'C5 – Top-up Tax Allocation' workspace is displayed.
'C5 – Top-up Tax Allocation' workspace

To access this workspace and display the desired values:

1

Select a snapshot in the Home workspace.

2

Navigate to C5 – Top-up Tax Allocation.

3

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

Notes on the Individual Sections

Low-taxed CE Allocated Top-Up Tax

FieldDescription
TA-1ISO code of the jurisdiction or subgroup.
TA-2.1Positive GloBE income of the low-taxed CE or member of Joint Venture Group.
TA-2.2Total GloBE Income of the Jurisdiction or Subgroup. Equal to INC-3 of the entire jurisdiction or subgroup.
TA-2Relevant Percentage of the Net GloBE Income: {TA-2.1} / {TA-2.2} * 100.
TA-3.1Total Top-Up Tax Amount of the Jurisdiction or Subgroup. Equal to TT-3.
TA-3Top-Up Tax Amount of the low-taxed CE or member of Joint Venture Group: {TA-2} * {TA-3.1} / 100.

Income Inclusion Rule

FieldDescription
TA-4.1Inclusion of Top-up Tax Expense of subsidiaries. Equal to the Total amount in IR-1.
TA-4.2Income Inclusion Rule Offset: {TA-3} * {TA-4.1} / 100.
TA-5Allocation of Top-up Tax Amount to local CE under a QDMTT.

Additional Current Top-up Tax

FieldDescription
TA-6.1Total Amount of Additional Current Top-up Tax of the Jurisdiction or Subgroup.
TA-6.2Allocation Basis.
TA-6.3Allocation Rate.
TA-6Additional Current Top-up Tax allocated to CE or member of Joint Venture Group.
TA-7Additional Current Top-up Tax Expense of CE or member of Joint Venture Group.

Last updated on Aug 16, 2023

Table of Contents
C5 – Top-up Tax AllocationOverviewNavigationNotes on the Individual SectionsLow-taxed CE Allocated Top-Up TaxIncome Inclusion RuleAdditional Current Top-up Tax
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