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CA Final · Direct Tax Laws & International Taxation · Latest Developments in International Taxation

An MNE group with consolidated revenue of EUR 900 million in at least two of the four preceding years operates in several countries. Under the Pillar Two GloBE model rules, which statement is correct about whether the group is in scope?

The group is in scope because Pillar Two GloBE rules apply to MNE groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding years. EUR 900 million exceeds that threshold, and the rules are not limited to digital businesses.

  1. AIt is out of scope because the threshold is EUR 1 billion
  2. BIt is in scope because the threshold is consolidated revenue of EUR 750 million or moreCorrect
  3. CIt is in scope only if it has a permanent establishment in India
  4. DIt is out of scope because Pillar Two applies only to digital companies

Explanation

GloBE rules apply to MNE groups with annual consolidated group revenue of at least EUR 750 million in at least two of the four fiscal years immediately preceding the tested year. EUR 900 million exceeds this. The EUR 1 billion figure is wrong, and Pillar Two is not restricted to digital businesses.

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