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Information exchange under a Qualifying Competent Authority Agreement

Applies
FY2024 onwards
Reviewed
Rule
P2-QCAA-2024.1
By

When does an exchange agreement excuse local GIR filing?

When an agreement for automatic annual exchange of GloBE returns is in effect for the year, and the return actually reaches the local authority.

Per GloBE Model Rules (Pillar Two), December 2021, Article 10.1, definition of Qualifying Competent Authority Agreement, and Article 8.1.2

A Qualifying Competent Authority Agreement is a bilateral or multilateral agreement or arrangement between Competent Authorities that provides for the automatic exchange of annual GloBE Information Returns. To discharge a local filing obligation it must be in effect between the two jurisdictions for the Reporting Fiscal Year. If the local Competent Authority has not received the return under it and has followed its notification and other procedures, the condition in Article 8.1.2 is not met.

A group can file once with the tax administration of the UPE or a Designated Filing Entity and have the return reach the others.

What the result turns on

What it provides, not what it is called

  • An agreement or arrangement between Competent Authorities
  • Automatic exchange, not on request
  • Of the GloBE Information Return
  • Annually

Bilateral or multilateral

The Commentary expects models built on the Convention on Mutual Administrative Assistance in Tax Matters, a TIEA, a Tax Treaty with an Article 26 equivalent or another instrument allowing automatic exchange. The form does not decide it.

In effect for the year

Article 8.1.2 asks for an agreement in effect for the Reporting Fiscal Year.

It must deliver

If the local Competent Authority has not received the return and has followed the agreement's procedures, the condition is not met, subject to the agreement's terms, and the local obligation revives.

Lists

Each jurisdiction should publish and update a list of the jurisdictions with which it has such agreements.

Order of testing

  1. 1

    The definition of a Qualifying Competent Authority Agreement

    Competent Authorities, automatic, the return, annual.

  2. 2

    In effect for the Reporting Fiscal Year

    Article 8.1.2.

  3. 3

    The return must reach the local Competent Authority

    Commentary paragraph 11.

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 multilateral agreement in effect

An agreement between Competent Authorities for automatic annual exchange of the GloBE return, in effect for the year, which has delivered.

Computed

The instrument is a Qualifying Competent Authority Agreement in effect for the Reporting Fiscal Year as computed: it is a multilateral agreement or arrangement between Competent Authorities that provides for the automatic annual exchange of GloBE Information Returns. A filing by the Ultimate Parent Entity or a Designated Filing Entity in a jurisdiction party to it can therefore discharge the local filing obligation under Article 8.1.2, with the notification in Article 8.1.3 still required. Based on what you supplied.

Decided by the definition of a qualifying competent authority agreement

Exchange on request only

A treaty exchange article that works on request.

Computed

The instrument is not a Qualifying Competent Authority Agreement as computed: it does not provide for automatic exchange; the exchange is not annual. Article 10.1 requires a bilateral or multilateral agreement or arrangement between Competent Authorities that provides for the automatic exchange of annual GloBE Information Returns, whatever the instrument is called. Based on what you supplied.

Decided by the definition of a qualifying competent authority agreement

A qualifying agreement that has not delivered

The local Competent Authority has not received the return and has followed the agreement's procedures.

Computed

The agreement qualifies but the condition in Article 8.1.2 is not met as computed: the local Competent Authority has not received the GloBE Information Return under it and has followed the agreement's notification and other procedures, so, subject to the agreement's terms, the local filing obligation is not discharged (Commentary paragraph 11). Based on what you supplied.

Decided by the return must reach the local competent authority

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

5 inputs still need your determination:

  • Is the instrument a multilateral agreement or arrangement, a bilateral one, or another kind of instrument?
  • Is it an agreement or arrangement between Competent Authorities?
  • Does it provide for the exchange to be automatic, and not only on request?
  • Does it cover the GloBE Information Return?
  • Is the exchange annual?

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