Post-filing adjustments and changes in tax rate
- Applies
- FY2024 onwards
- Reviewed
- Rule
- P2-PFA-2024.1
How are later changes to prior-year taxes treated?
An increase counts in the year it is recorded. A decrease reopens the earlier year, unless it is under EUR 1 million and an election treats it as current.
Per GloBE Model Rules (Pillar Two), December 2021, Article 4.6, Post-filing Adjustments and Tax Rate Changes
An adjustment to a Constituent Entity's liability for Covered Taxes for a previous Fiscal Year recorded in the financial accounts is treated as an adjustment to Covered Taxes in the Fiscal Year in which it is made, unless it is a decrease. In the case of a decrease in Covered Taxes included in Adjusted Covered Taxes for a previous Fiscal Year, the Effective Tax Rate and Top-up Tax for that year are recalculated under Article 5.4.1. A Filing Constituent Entity may make an Annual Election to treat an immaterial decrease — an aggregate decrease of less than the published amount in the Adjusted Covered Taxes determined for the jurisdiction for a Fiscal Year — as an adjustment in the Fiscal Year in which it is made. If more than the published amount of current tax expense included in Adjusted Covered Taxes for a Fiscal Year is not paid within three years of the last day of that year, that year is recalculated excluding the unpaid amount.
Top-up Tax already paid is never refunded, and Top-up Tax avoided by overstated tax is collected — in the current year, without amending the earlier return.
Increases look forward, decreases look back
An increase
Taken into account in the year the adjustment is made. The earlier year is not reopened.
A decrease
The earlier year is recalculated with the lower tax, and with GloBE Income adjusted where the error was in income too. Any resulting tax is Additional Current Top-up Tax of the current year.
The immaterial decrease election
An aggregate decrease for the jurisdiction and year below the published amount may, by Annual Election, be taken in the current year instead. Without the election even a small decrease reopens the year.
Tax claimed and not paid
Current tax above the published amount that is still unpaid three years after the year end is taken out of that year, which is recalculated.
A loss carried back
The refund is a decrease for the earlier year, matched by a deemed deferred tax asset in the loss year at no more than the Minimum Rate, so that a carry-back and a carry-forward come out alike.
Changes of tax rate
A cut in the domestic rate to below the Minimum Rate is a decrease for the year the deferred tax was claimed. A rise from a rate below the Minimum Rate is an increase when the deferred tax is paid, up to the recast at the Minimum Rate. Neither is computed here.
Order of testing
- 1
Inputs requiring your determination
Every input the computation reaches must be supplied; nil is entered, not left blank.
- 2
An increase in Covered Taxes for a previous year
An adjustment in the current year.
- 3
A decrease in Covered Taxes for a previous year
The previous year is recalculated.
- 4
The immaterial decrease election
Below the published amount, and elected.
- 5
Current tax not paid within three years
Above the published amount, the year is recalculated.
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.
An audit assessment for an earlier year
EUR 4 million of additional tax assessed for a previous Fiscal Year.
Computed
The increase of EUR 4,000,000 is treated as an adjustment to Covered Taxes in FY2027, the Fiscal Year in which it is made, as computed (Article 4.6.1). The previous year is not recalculated, so no Top-up Tax already paid for it is refunded. Based on the figures you supplied.
Workings
- Aggregate amount for the jurisdiction and yearArticle 4.6 — as supplied
- EUR 4,000,000
Decided by the an increase in covered taxes for a previous year
A refund on a successful appeal
A EUR 4 million refund of an earlier year's tax.
Computed
The previous Fiscal Year is recalculated as computed (Article 4.6.1): its Adjusted Covered Taxes are reduced by the decrease of EUR 4,000,000, its GloBE Income is adjusted as necessary and appropriate, and its Effective Tax Rate and Top-up Tax are redetermined under Article 5.4.1. Any increase is Additional Current Top-up Tax of FY2027; the earlier return is not amended. The decrease is not less than EUR 1,000,000, so it is not immaterial and the election is not available. Based on the figures you supplied.
Workings
- Aggregate amount for the jurisdiction and yearArticle 4.6 — as supplied
- EUR 4,000,000
- Published amountArticle 4.6 — published value for FY2027
- EUR 1,000,000
Decided by the a decrease in covered taxes for a previous year
A small refund, elected
A EUR 300,000 refund with the Annual Election made.
Computed
The decrease of EUR 300,000 is treated as an adjustment to Covered Taxes in FY2027 as computed (Article 4.6.1): it is an aggregate decrease of less than EUR 1,000,000 in the Adjusted Covered Taxes of the jurisdiction for the previous Fiscal Year, and the Annual Election for immaterial decreases is made. The previous year is not recalculated. Based on the figures you supplied.
Workings
- Aggregate amount for the jurisdiction and yearArticle 4.6 — as supplied
- EUR 300,000
- Published amountArticle 4.6 — published value for FY2027
- EUR 1,000,000
Decided by the immaterial decrease election
Tax still unpaid after three years
EUR 2.5 million of current tax claimed and never paid.
Computed
The Fiscal Year in which the tax was claimed is recalculated as computed (Article 4.6.4): EUR 2,500,000 of current tax expense included in its Adjusted Covered Taxes has not been paid within three years of its last day, which is more than EUR 1,000,000. Its Effective Tax Rate and Top-up Tax are redetermined under Article 5.4.1 excluding the unpaid amount, and any increase is Additional Current Top-up Tax of FY2027. Based on the figures you supplied.
Workings
- Aggregate amount for the jurisdiction and yearArticle 4.6 — as supplied
- EUR 2,500,000
- Published amountArticle 4.6 — published value for FY2027
- EUR 1,000,000
Decided by the current tax not paid within three years
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
2 inputs still need your determination:
- Is this an increase in the liability for Covered Taxes for a previous Fiscal Year, a decrease in it, or current tax expense that was claimed and has not been paid within three years?
- What is the aggregate amount for the jurisdiction for that previous Fiscal Year — the increase, the decrease, or the unpaid tax — in euro, as a positive figure?
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.post_filing_immaterial_decrease
- EUR 1,000,000 · reviewed 2026-10-04 · source
- pillar_two.unpaid_current_tax_recalculation
- EUR 1,000,000 · 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
GloBE Model Rules (Pillar Two), December 2021 — Article 4.6, Post-filing Adjustments and Tax Rate Changes
The article this rule encodes
https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/12/tax-challenges-arising-from-digitalisation-of-the-economy-global-anti-base-erosion-model-rules-pillar-two_eed81a23/782bac33-en.pdfConsolidated Commentary to the GloBE Model Rules (May 2026) — Commentary to Article 4.6
Paragraphs 119 to 133: the asymmetry in 120 and 121, loss carry-backs in 124 to 126, rate changes in 128 to 131
https://www.oecd.org/content/dam/oecd/en/publications/reports/2026/05/tax-challenges-arising-from-the-digitalisation-of-the-economy-consolidated-commentary-to-the-global-anti-base-erosion-model-rules-2026_24289ddf/4377e89f-en.pdf