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Marketable Transferable Tax Credits

Applies
FY2024 onwards
Reviewed
Rule
P2-MTTC-2024.1
By

When is a transferable tax credit income under Pillar Two?

When it can be sold to an unrelated party and trades at 80% or more of its net present value. Otherwise it reduces taxes.

Per Consolidated Commentary to the GloBE Model Rules (May 2026), Commentary to Article 3.2.4, Marketable Transferable Tax Credits

A Marketable Transferable Tax Credit is a tax credit that can be used by its holder to reduce its liability for a Covered Tax in the jurisdiction that issued it and that meets the legal transferability standard and the marketability standard in the hands of the holder. The legal transferability standard is met for the Originator if the regime lets it transfer the credit to an unrelated party in the Origination Year or within the published number of months of its end, and for a purchaser if it can transfer the credit to an unrelated party in the Fiscal Year of purchase. The marketability standard is met where the credit is transferred, acquired or trades between unrelated parties at a price that equals or exceeds the Marketable Price Floor — the published share of its net present value. Such a credit is treated as income; a transferable credit that is not marketable reduces Covered Taxes.

It extends the income treatment of refundable credits to credits the holder can turn into cash by selling them, and withholds it where there is no real market.

Two standards, tested for the holder

Legal transferability

For the Originator: transferable to an unrelated party in the Origination Year or within the published months after it. For a purchaser: transferable on to an unrelated party in the year of purchase, on terms no stricter than the Originator's.

Marketability

The price equals or exceeds the Marketable Price Floor. For the Originator the price is what it sold for within the period — or, if it kept the credit or sold to a related party, what similar credits trade for between unrelated parties. For a purchaser it is the price it paid.

The floor

The published share of the credit's net present value, discounted at the yield to maturity of the issuing government's debt of equal or similar maturity (up to five years), on the maximum amount usable each year.

If marketable — income

  • Originator: the face value in the Origination Year, or the transfer price instead if sold within the period
  • Purchaser: the discount to face value, in proportion as the credit is used
  • Any amount recorded as a reduction of current tax is added back to Covered Taxes

If transferable but not marketable — a reduction of tax

  • Originator: reduces Covered Taxes as the credit is used, and by any amount received for it
  • Purchaser: reduces Covered Taxes by the excess of face value over price, as the credit is used

Refundability first

A credit that is a Qualified Refundable Tax Credit is treated as one and is not tested here.

Order of testing

  1. 1

    Inputs requiring your determination

    Every input the computation reaches must be supplied; nil is entered, not left blank.

  2. 2

    Refundability before transferability

    A Qualified Refundable Tax Credit is not tested here.

  3. 3

    The legal transferability standard

    In the hands of the holder.

  4. 4

    The marketability standard

    The price against the Marketable Price Floor: 'equals or exceeds'.

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.

The Commentary's credit, sold at 85

A credit of 100 with a net present value of 89.04, sold by its Originator for 85.

Computed

The credit is a Marketable Transferable Tax Credit in the hands of the Originator as computed: it meets the legal transferability standard, and the price of EUR 85 equals or exceeds the Marketable Price Floor of EUR 71.23, 80% of the net present value of EUR 89.04. It is treated as income, not as a reduction of tax: the Originator includes its face value in GloBE Income in the Origination Year, or the transfer price in its place where it transfers the credit within 15 months of the end of that year. Any amount recorded as a reduction to current tax expense is added back to Covered Taxes (Article 4.1.2(d)). Based on the figures you supplied.

Workings

Net present value of the creditCommentary to Article 3.2.4, paragraph 112.1(b) — as supplied
EUR 89.04
Marketable Price Floor80% of the net present value — published value
EUR 71.23
Transfer or market priceEquals or exceeds the floor: the marketability standard is met
EUR 85

Decided by the marketability standard

The same credit, sold at 65

Below the floor: transferable, but not marketable.

Computed

The credit is a Non-Marketable Transferable Tax Credit in the hands of the Originator as computed: it is legally transferable, but the price of EUR 65 is below the Marketable Price Floor of EUR 71.23, 80% of the net present value of EUR 89.04. It is not income. The Originator reduces its Covered Taxes to the extent the credit is used against a Covered Tax liability, and by any amount received in exchange for it. Based on the figures you supplied.

Workings

Net present value of the creditCommentary to Article 3.2.4, paragraph 112.1(b) — as supplied
EUR 89.04
Marketable Price Floor80% of the net present value — published value
EUR 71.23
Transfer or market priceBelow the floor: the marketability standard is not met
EUR 65

Decided by the marketability standard

A purchaser who cannot sell on

A credit bought from its Originator under a regime that allows only one transfer.

Computed

The credit is not a Marketable Transferable Tax Credit in the hands of the purchaser as computed: it does not meet the legal transferability standard. A purchased credit that cannot be transferred on is a Non-Marketable Transferable Tax Credit in the purchaser's hands: it reduces Covered Taxes by the excess of face value over purchase price, in proportion as the credit is used. Based on what you supplied.

Decided by the legal transferability standard

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 credit a Qualified Refundable Tax Credit? Refundability is tested first; only a credit that is not one is tested for transferability.

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.

Thresholds

pillar_two.mttc_marketable_price_floor
80% · reviewed 2026-10-04 · source
pillar_two.mttc_transfer_window_months
count 15 · reviewed 2026-10-04 · source

Threshold values are published separately from the rule and carried with a citation. Where none has been published for the period being computed, the rule reports that rather than applying a default.

Sources

Share this rule

Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader