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Glossary

Jurisdictional Elections

Overview

The Jurisdictional Elections workspace contains elections on the level of individual jurisdictions and subgroups.

The Jurisdictional Elections workspace can be found at Pillar 2 | Jurisdictional Elections. The workspace is displayed as follows, for example:

'Jurisdictional Elections' workspace
'Jurisdictional Elections' workspace

Configuring Jurisdictional Elections

To configure jurisdictional elections pursuant to the OECD model rules:

1

Make sure the right period is selected in the Applies to period drop-down menu.

2

Select a jurisdiction from the drop-down menu.

3

Select a subgroup from the drop-down menu. For elections pertaining to a jurisdiction per se, you do not have to select a subgroup, but can retain the default option ---.

4

Configure the applicable elections in the categories Annual Elections, Five-year Elections, Safe Harbour Elections and Jurisdictional Exclusions, and Other elections (see also Election Categories below).

5

Click Save to save your changes.

Notes:

  • Some elections have a direct effect on the calculations in the Pillar 2 module, for example JE-10. Others, like JE-33, do not impact the calculations but must still be reported to the tax authorities if exercised.
  • You can assess the effect of individual elections by creating one snapshot before activating the election and another snapshot afterwards.

Election Categories

The following election categories are available:

Annual Elections

Annual elections only apply to the current reporting period and can be selected differently for every year.

JE-10

Aggregate asset gain election (Article 3.2.6)

Activate this checkbox to include values stored at INC-2.16 and CT-2.12 in the CE calculation (C2) and in the jurisdictional blending (C4). Otherwise those values will be disregarded.

Note: This election has no effect on lines I-3 of the CE calculation and the jurisdictional blending. Gains and losses on immovable assets are always assessed at the CE level and aggregated and carried forward as part of the jurisdictional blending.

JE-12

Election not to apply the Substance-based Income Exclusion (Article 5.3.1)

Activate this checkbox if you want all data in CO-1.1 to CO-2.2 to be disregarded in the CE calculation and in the jurisdictional blending. Therefore, the carve-out amount in the CE calculation as well as the jurisdictional blending is set to zero.

JE-13

Negative Tax Expense Carry-forward

By default, excess negative tax expenses generated in case of a GloBE loss are recognized as part of the additional top-up tax amount (TT-2.2). Activate this checkbox to include that amount in the excess negative tax expense carry-forward (I-1.2) instead.

Note: The election has no effect on the negative tax expense amount (TCF-1.1) that is automatically generated if the negative tax expense exceeds the expected negative tax expense.

Note: JE-11 and JE-14 are only informational.

Five-year Elections

Five-year elections apply for the period of five years and cannot be changed within that period.

JE-31

Stock-based compensation election (Article 3.2.2)

Activate this checkbox to include values stored at INC-2.12 in the CE calculation and the jurisdictional blending. Otherwise those values will be disregarded.

JE-32

Realisation principle election (Article 3.2.5)

Activate this checkbox to include values stored at INC-2.15 in the CE calculation and the jurisdictional blending. Otherwise those values will be disregarded.

JE-34

Election not to allocate cross-border deferred tax

Activate this checkbox to elect not to allocate cross-border deferred tax.

Note: JE-30 and JE-33 are only informational.

Safe Harbor Elections and Jurisdictional Exclusions

The elections in this passage will set the top-up tax of the jurisdiction to zero. This may be the case if the Safe Harbor Rules apply for a jurisdiction during the transition phase or when the De Minimis Exclusion is applicable.

JE-40

Transitional Safe Harbour Election

Choose the appropriate option from the drop-down menu to apply a transitional safe harbour:

  • Option not exercised or applicable: No transitional safe harbour is applied
  • Elected - De minimis test: Applies the de minimis test transitional safe harbour
  • Elected - ETR test: Applies the ETR test transitional safe harbour
  • Elected - Routine profits test: Applies the routine profits test transitional safe harbour

When a transitional safe harbour is applied, the top-up tax in the jurisdictional value is set to zero by adding a value in TT-3.1.

Note: If you want to apply the option Permanent Safe Harbour Election (JE-41), you must confirm not to exercise the transitional Safe Harbour by choosing Option not exercised or applicable.

JE-41

Permanent Safe Harbour Election

Choose the appropriate option from the drop-down menu to apply a permanent safe harbour:

  • Option not exercised or applicable: No permanent safe harbour is applied
  • Elected - De minimis test: Applies the de minimis test (standard de minimis exclusion based on revenue and income thresholds)
  • Elected - NMCE De minimis test: Applies the de minimis test for Non-Material Constituent Entities (NMCE)
  • Elected - NMCE ETR test: Applies the Effective Tax Rate (ETR) test for Non-Material Constituent Entities
  • Elected - NMCE Routine profits test: Applies the routine profits test for Non-Material Constituent Entities

When any of these options is selected, the top-up tax in the jurisdictional value is set to zero by adding a value in TT-3.1.

JE-42

Activate this checkbox to confim that the MNE Group elects to apply the transitional simplified jurisdictional reporting framework.

Other elections

Contains elections other than mentioned above.

JE-50

GloBE Loss Election (Article 4.5)

Activate this checkbox to set the total deferred tax adjustment amount and all data on deferred taxes and adjustments to zero, both in the CE calculation and the jurisdictional blending.

In case of an overall loss in the jurisdiction, activating this checkbox:

  • Shows a GloBE loss carry-forward equal to the positive amount of the GloBE loss (I-2.2).
  • Shows deferred tax income from the GloBE loss generated in the current period equal to the amount of the GloBE loss multiplied by the minimum tax rate of 15 % (GL-1.1).
  • Adds the deferred tax income to the sum of the adjusted covered taxes instead of the total deferred tax adjustment amount in the jurisdictional blending.

In case of an overall GloBE income, activating this checkbox uses the GloBE loss carry-forward from prior periods (I-2.1) as deferred tax expense (GL-1.2) that lower the adjusted covered taxes of the jurisdiction. The deferred tax expense is the lesser amount of the GloBE income multiplied by the minimum tax rate and the GloBE loss carry-forward multiplied by the minimum tax rate.

In case of a GloBE loss carry-forward from prior periods, leaving JE-50 unchecked results in the loss carry-forward being fully used in the current period without regard to the GloBE Income.

Last updated on May 1, 2026

Table of Contents
OverviewNavigationConfiguring Jurisdictional ElectionsElection CategoriesAnnual ElectionsFive-year ElectionsSafe Harbor Elections and Jurisdictional ExclusionsOther elections
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