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Designated Filing Entity

Applies
FY2024 onwards
Reviewed
Rule
P2-DFE-2024.1
By

Who files the GloBE Information Return?

Each local entity, itself or through a designated local entity, unless the UPE or a Designated Filing Entity files where an exchange agreement is in effect.

Per GloBE Model Rules (Pillar Two), December 2021, Articles 8.1.1 to 8.1.3

Each Constituent Entity located in the implementing jurisdiction files a GloBE Information Return there, itself or through a Designated Local Entity. It is not obliged to if the return has been filed by the Ultimate Parent Entity, or by a Designated Filing Entity, located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with the implementing jurisdiction for the Reporting Fiscal Year. It must then notify the local tax administration of the identity and location of the filing Entity. A Designated Filing Entity is a Constituent Entity, other than the UPE, appointed by the group to file on its behalf.

A group can file once, centrally, and have the return reach other tax administrations by exchange of information.

What the result turns on

Both parts of the discharge

The return must be filed by the UPE or a Designated Filing Entity, and the filer's jurisdiction must have a Qualifying Competent Authority Agreement in effect with the implementing jurisdiction for the year. A filing in a jurisdiction without one discharges nothing.

A notification remains

The local Constituent Entity or its Designated Local Entity still notifies who is filing and where, by the same date as the return.

Locally

A Designated Local Entity's return on behalf of the Constituent Entities located in the jurisdiction discharges their obligation to file their own.

Who need not file

  • A Stateless Constituent Entity, which is not located in the jurisdiction — though its Constituent Entity owners do
  • A Joint Venture or JV Subsidiary, which is not a Constituent Entity of the group
  • A Flow-through Entity that is the UPE or must apply an IIR does file, being located where it was created

Multi-parented groups

The UPEs file, unless they appoint a single Designated Filing Entity.

Order of testing

  1. 1

    Where the Entity is located

    A Stateless Constituent Entity has no local obligation.

  2. 2

    Whether the Entity is a Constituent Entity

    A Joint Venture or JV Subsidiary files nothing for the group.

  3. 3

    The local filing obligation

    Filed locally, or still outstanding.

  4. 4

    Filing by the Ultimate Parent Entity or a Designated Filing Entity

    Discharged only with a Qualifying Competent Authority Agreement.

Examples

Illustrative scenarios — ours, not the authority’s — each computed live by this rule. Change any fact and the outcome is the rule’s, not a hand-written answer.

Filed centrally with an agreement

The Ultimate Parent Entity files in a jurisdiction that has a Qualifying Competent Authority Agreement with this one for the year.

Computed

The local filing obligation is discharged as computed: the Ultimate Parent Entity has filed in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with this jurisdiction for the Reporting Fiscal Year, so Article 8.1.2 relieves the local Constituent Entities. They must still notify the local tax administration of the identity and location of the filing Entity (Article 8.1.3), within the same 15 months as the return. Based on what you supplied.

Decided by the filing by the ultimate parent entity or a designated filing entity

Filed centrally with no agreement

A Designated Filing Entity files in a jurisdiction with no such agreement here.

Computed

The local filing obligation remains as computed: a Designated Filing Entity has filed, but not in a jurisdiction with a Qualifying Competent Authority Agreement in effect with this jurisdiction for the Reporting Fiscal Year, so the condition in Article 8.1.2 is not met and each Constituent Entity located here must file under Article 8.1.1. Based on what you supplied.

Decided by the filing by the ultimate parent entity or a designated filing entity

A Stateless Constituent Entity

Located in no jurisdiction.

Computed

The Entity has no local filing obligation as computed: Article 8.1.1 puts the obligation on a Constituent Entity located in the implementing jurisdiction, and a Stateless Constituent Entity is not located in any jurisdiction. Its Constituent Entity owners, which are located somewhere, do have one. Based on what you supplied.

Decided by the where the entity is located

Try it

Supply the facts and this rule computes the outcome in your browser, live. Leave a determination undecided and it blocks the result — it is never read as a no.

Not computed yet

1 input still need your determination:

  • Is the Entity a Constituent Entity located in the jurisdiction, a Stateless Constituent Entity, or a Joint Venture or JV Subsidiary?

Computed in your browser from the figures you supply. Nothing is sent anywhere, and the result is a computation against a rule — reference, not tax advice.

Sources

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Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader