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MNE Group and the revenue threshold

Applies
FY2024 onwards
Reviewed
Rule
P2-SCOPE-2024.1
By

Which groups are in scope of Pillar Two?

Multinational groups with consolidated revenue of EUR 750 million or more in at least 2 of the four preceding fiscal years.

Per GloBE Model Rules (Pillar Two), December 2021, Articles 1.1 and 1.2, Scope of GloBE Rules; MNE Group and Group

The GloBE Rules apply to Constituent Entities that are members of an MNE Group with annual revenue at or above the published threshold in the Consolidated Financial Statements of the Ultimate Parent Entity in at least the published number of the four Fiscal Years immediately preceding the tested Fiscal Year. A Fiscal Year of other than twelve months is measured against a proportionally adjusted threshold. An Entity that is an Excluded Entity is not subject to the GloBE Rules. A Group is an MNE Group if it includes at least one Entity or Permanent Establishment that is not located in the jurisdiction of the Ultimate Parent Entity.

The gate to every other Pillar Two rule. Being within the group threshold is not the same as being liable: the charging provisions of Chapter 2 name who pays, and an Excluded Entity is outside the rules altogether.

The group test, and what sits beside it

Article 1.1 — the revenue test

  • Annual revenue in the Consolidated Financial Statements of the Ultimate Parent Entity
  • At or above the published threshold — "or more", so a figure exactly at the threshold meets it
  • In at least the published number of the four Fiscal Years immediately preceding the tested Fiscal Year
  • Article 6.1 modifies the test after certain mergers and demergers in that period — not applied by this rule

What counts as revenue

  • The revenue in the profit and loss statement of the Consolidated Financial Statements: inflows from delivering goods, rendering services and the group's other ordinary activities, before cost of sales and operating expenses
  • Revenue presented on separate lines is added together
  • Net gains from investments, realised or unrealised, and income or gains presented as extraordinary or non-recurring items are included; gross investment losses presented separately are set against the gross gains
  • For a financial group, the item its accounting standard treats as equivalent to revenue — net banking product, net revenues — is used
  • Income outside the ordinary activities, such as a manufacturer's ancillary interest income shown below operating costs, is not revenue; interest and leasing income earned in the ordinary course is

Whose revenue

  • The consolidated figure, after intra-group transactions are eliminated — not the sum of the entities' own revenues
  • Not reduced for the share of a subsidiary that belongs to minority shareholders
  • The revenue of an Excluded Entity that is consolidated counts toward the threshold, although the Excluded Entity itself is outside the rules
  • The tested year's own revenue is never looked at, so a group knows at the start of a year whether it is in scope

A newly formed group

A group with no earlier financial statements cannot be in scope in its first two years, however large: the third year is the first in which two preceding years can be tested. Where entities that were not in a Group are brought under common control, Article 6.1 tests the sum of their own revenues for the earlier years instead.

Article 1.1.2 — a short Fiscal Year

Where a Fiscal Year taken into account is not twelve months, the threshold for that year is adjusted proportionally to its length. A nine-month year is measured against nine twelfths of the threshold.

A group that reports in another currency

The threshold is in euro and the test is made on the Consolidated Financial Statements as they are. A group whose presentation currency is not the euro translates the threshold, year by year, at the average exchange rate for the month of December of the calendar year before the one in which that Fiscal Year starts — the European Central Bank's reference rate, or the implementing jurisdiction's central bank where there is none. Each of the four preceding years therefore has its own translated threshold; one rate is not applied to all of them, and a year once tested is not re-translated later.

No consolidated accounts is not a way out

Where the Ultimate Parent Entity does not prepare consolidated financial statements — a privately or family-owned group that no law requires to consolidate — the definition of Consolidated Financial Statements applies a deemed consolidation test: the statements that would have been prepared had the Entity been required to prepare them under an Authorised Financial Accounting Standard. The revenue test is made on those.

Article 1.2 — MNE Group and Group

  • An MNE Group is any Group that includes at least one Entity or Permanent Establishment not located in the jurisdiction of the Ultimate Parent Entity
  • A Group is a collection of Entities related through ownership or control whose assets, liabilities, income, expenses and cash flows are in the Consolidated Financial Statements of the Ultimate Parent Entity — or are excluded only on size, materiality or held-for-sale grounds
  • A single Entity with Permanent Establishments in other jurisdictions is also a Group, provided it is not part of another Group

Article 1.5 — Excluded Entities

  • A Governmental Entity, an International Organisation, a Non-profit Organisation, a Pension Fund
  • An Investment Fund or a Real Estate Investment Vehicle that is an Ultimate Parent Entity
  • Certain Entities almost wholly owned by those, on the conditions Article 1.5.2 sets out
  • A Filing Constituent Entity may elect not to treat an Entity as an Excluded Entity under Article 1.5.2; the election is a Five-Year Election

Order of testing

  1. 1

    Inputs requiring your determination

    Whether the Group is an MNE Group, whether the Entity is an Excluded Entity, and the preceding years' revenue. An undecided input is never read as a no.

  2. 2

    An MNE Group

    A Group with no Entity or Permanent Establishment outside the Ultimate Parent Entity's jurisdiction is outside the rules.

  3. 3

    Consolidated revenue in the preceding Fiscal Years

    The published threshold must be met in at least the published number of the four immediately preceding Fiscal Years. The tested year itself is not looked at.

  4. 4

    Excluded Entities

    A Group within scope can still contain an Entity that is not subject, because it is an Excluded Entity.

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.

A large group, four qualifying years

A group whose consolidated revenue exceeded the threshold in each of the four preceding Fiscal Years, testing an ordinary Constituent Entity.

Computed

The Entity is within the scope of the GloBE Rules as computed: the annual revenue in the Ultimate Parent Entity's Consolidated Financial Statements met the published threshold of EUR 750,000,000 in 4 of the four Fiscal Years immediately preceding FY2026, which satisfies the 2 that Article 1.1.1 requires. Whether any Top-up Tax arises is a separate computation, and Article 6.1 can modify this test after a merger or demerger in that period, which is not applied here. Based on the figures you supplied.

Workings

FY2022 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 900,000,000
FY2023 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 950,000,000
FY2024 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 1,000,000,000
FY2025 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 1,100,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
4

Decided by the consolidated revenue in the preceding fiscal years

Above the line only this year

A growing group that has just crossed the threshold: every preceding year is below it, so the group is not yet in scope however large the tested year is.

Computed

The GloBE Rules do not apply as computed: Article 1.1.1 requires annual revenue of at least EUR 750,000,000 in the Ultimate Parent Entity's Consolidated Financial Statements in at least 2 of the four Fiscal Years immediately preceding the tested year, and 0 of the 4 years you supplied meet it. The test looks at those years and not at the tested year, so revenue in this year does not change the answer. Article 6.1 can modify the test after a merger or demerger in that period, which is not applied here. Based on the figures you supplied.

Workings

FY2022 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 400,000,000
FY2023 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 500,000,000
FY2024 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 650,000,000
FY2025 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 720,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
0

Decided by the consolidated revenue in the preceding fiscal years

Two years out of four, not consecutive

A cyclical group that was above the threshold in the first and the last of the four preceding Fiscal Years and below it in the two between. Two qualifying years are enough, and they need not be consecutive.

Computed

The Entity is within the scope of the GloBE Rules as computed: the annual revenue in the Ultimate Parent Entity's Consolidated Financial Statements met the published threshold of EUR 750,000,000 in 2 of the four Fiscal Years immediately preceding FY2026, which satisfies the 2 that Article 1.1.1 requires. Whether any Top-up Tax arises is a separate computation, and Article 6.1 can modify this test after a merger or demerger in that period, which is not applied here. Based on the figures you supplied.

Workings

FY2022 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 800,000,000
FY2023 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 600,000,000
FY2024 consolidated revenueagainst the published threshold of EUR 750,000,000 — below it
EUR 700,000,000
FY2025 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 760,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
2

Decided by the consolidated revenue in the preceding fiscal years

A large group with no foreign operations

A group with consolidated revenue of EUR 2 billion whose entities and branches are all in the Ultimate Parent Entity's own jurisdiction. It is not an MNE Group, so the GloBE Rules do not apply — though a jurisdiction's domestic minimum top-up tax may be drawn to reach purely domestic groups.

Computed

The GloBE Rules do not apply as computed: Article 1.1.1 applies to Constituent Entities that are members of an MNE Group, and Article 1.2.1 makes a Group an MNE Group only where it includes at least one Entity or Permanent Establishment that is not located in the jurisdiction of the Ultimate Parent Entity — which you have indicated it does not. Article 1.2.3 also makes a single Entity with Permanent Establishments in other jurisdictions a Group, which is your determination.

Decided by the an mne group

A group formed two years ago

The Commentary's AB Group: formed in Year 1, with consolidated revenue of EUR 750 million in each of its first two years. It was outside the rules in both of them; in Year 3 it has two qualifying preceding years and is in scope, although it has no four-year history.

Computed

The Entity is within the scope of the GloBE Rules as computed: the annual revenue in the Ultimate Parent Entity's Consolidated Financial Statements met the published threshold of EUR 750,000,000 in 2 of the four Fiscal Years immediately preceding FY2026, which satisfies the 2 that Article 1.1.1 requires. Whether any Top-up Tax arises is a separate computation, and Article 6.1 can modify this test after a merger or demerger in that period, which is not applied here. Based on the figures you supplied.

Workings

FY2024 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 750,000,000
FY2025 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 750,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
2

Decided by the consolidated revenue in the preceding fiscal years

Short Fiscal Years

A recently formed group with two nine-month Fiscal Years, each meeting the proportionally reduced threshold though neither would meet the full figure.

Computed

The Entity is within the scope of the GloBE Rules as computed: the annual revenue in the Ultimate Parent Entity's Consolidated Financial Statements met the published threshold of EUR 750,000,000 in 2 of the four Fiscal Years immediately preceding FY2026, which satisfies the 2 that Article 1.1.1 requires. Whether any Top-up Tax arises is a separate computation, and Article 6.1 can modify this test after a merger or demerger in that period, which is not applied here. Based on the figures you supplied.

Workings

FY2024 consolidated revenuea 9-month Fiscal Year, so Article 1.1.2 adjusts the threshold proportionally to EUR 562,500,000 — meets it
EUR 600,000,000
FY2025 consolidated revenuea 9-month Fiscal Year, so Article 1.1.2 adjusts the threshold proportionally to EUR 562,500,000 — meets it
EUR 600,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
2

Decided by the consolidated revenue in the preceding fiscal years

An Excluded Entity inside a group in scope

The same large group, testing a Pension Fund member that is an Excluded Entity.

Computed

The MNE Group meets the revenue test as computed — the threshold is met in 4 of the four preceding Fiscal Years — but Article 1.1.3 provides that Entities that are Excluded Entities are not subject to the GloBE Rules, and you have indicated this Entity is one. Article 1.3.3 likewise takes an Excluded Entity outside the definition of a Constituent Entity. The Group being in scope still matters for the other Entities in it. Based on the figures you supplied.

Workings

FY2022 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 900,000,000
FY2023 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 950,000,000
FY2024 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 1,000,000,000
FY2025 consolidated revenueagainst the published threshold of EUR 750,000,000 — meets it
EUR 1,100,000,000
Preceding Fiscal Years meeting the thresholdArticle 1.1.1 requires at least 2 of the four immediately preceding Fiscal Years
4

Decided by the excluded entities

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.

Consolidated revenue, preceding Fiscal Years

One row for each of the four Fiscal Years immediately preceding the tested year, in euro, from the Ultimate Parent Entity's Consolidated Financial Statements. A row with no revenue is ignored. Enter the months only for a Fiscal Year that was not twelve months long.

Not computed yet

3 inputs still need your determination:

  • Is the Group an MNE Group — does it include at least one Entity or Permanent Establishment that is not located in the jurisdiction of the Ultimate Parent Entity (Article 1.2.1)? A single Entity with Permanent Establishments in other jurisdictions is also a Group (Article 1.2.3).
  • Is the Entity being tested an Excluded Entity under Article 1.5 — a Governmental Entity, International Organisation, Non-profit Organisation, Pension Fund, or an Investment Fund or Real Estate Investment Vehicle that is an Ultimate Parent Entity, or an Entity owned by those as Article 1.5.2 describes?
  • What was the annual revenue in the Ultimate Parent Entity's Consolidated Financial Statements in each of the four Fiscal Years immediately preceding this one? The test looks at those years, not at the tested year.

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.revenue_threshold
EUR 750,000,000 · reviewed 2026-10-04 · source
pillar_two.qualifying_preceding_years
count 2 · 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

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Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader