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QDMTT safe harbour

Applies
FY2024 onwards
Reviewed
Rule
P2-QDMTTSH-2026.1
By

What is the QDMTT safe harbour?

By election, IIR and UTPR top-up tax is nil where the jurisdiction's QDMTT meets the accounting, consistency and administration standards and is payable.

Per Consolidated Commentary to the GloBE Model Rules (May 2026), Annex A, Chapter 3, QDMTT Safe Harbour

At the election of the Filing Constituent Entity, the Top-up Tax for a jurisdiction is deemed to be zero for the IIR and UTPR where the Constituent Entities located there are subject to a QDMTT that meets the QDMTT Accounting Standard, the Consistency Standard and the Administration Standard. The election is made separately for each subgroup or standalone Entity subject to a separate QDMTT calculation, is available only where the QDMTT would be a Qualified Domestic Minimum Top-up Tax payable, and is not made where the Switch-off Rule applies.

The group relies on the QDMTT it pays in the jurisdiction instead of computing the IIR and UTPR there.

Three gates, then an election

1. The QDMTT meets the standards — a finding about the jurisdiction

  • Accounting Standard: the QDMTT adopts provisions equivalent to Articles 3.1.2 and 3.1.3, or the Local Financial Accounting Standard Rule
  • Consistency Standard: the QDMTT computes as the GloBE Rules do, except where the QDMTT Commentary requires a departure — it may omit or limit the SBIE and the de minimis exclusion, or use a rate above 15%
  • Administration Standard: the QDMTT meets the requirements of the ongoing monitoring process
  • The Inclusive Framework decides this in peer review. It is not specific to any MNE Group

2. The QDMTT is payable

A group cannot elect where its QDMTT liability is subject to a challenge or deemed not assessable (paragraph 20.1 of the Commentary to Article 5.2.3), even if the QDMTT meets the standards.

3. The Switch-off Rule does not apply

Where a group must apply it for a QDMTT jurisdiction, the Filing Constituent Entity does not make the election and the group switches to the credit method under Article 5.2.3. The restrictions the Inclusive Framework accepts without failing the Consistency Standard include no QDMTT on Flow-through Entities, on Investment Entities, or on Securitisation Entities.

The election is per unit

The main group's Constituent Entities, each JV Group and each Investment Entity subject to a separate QDMTT calculation are elected for separately. The result is for one such unit.

Order of testing

  1. 1

    The safe harbour standards

    A jurisdictional finding of the Inclusive Framework's peer review.

  2. 2

    The QDMTT must be payable

    Not subject to a challenge and not deemed not assessable.

  3. 3

    The Switch-off Rule

    Where it applies the election is not made.

  4. 4

    The election

    Made by the Filing Constituent Entity for each unit.

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.

All gates passed and elected

The QDMTT has been found to meet the standards, it is payable, the Switch-off Rule does not apply and the election is made for the unit.

Computed

The Top-up Tax of the jurisdiction is deemed to be zero for this unit as computed: its QDMTT meets the safe harbour standards, it is payable, the Switch-off Rule does not apply, and you have indicated the election has been made. The election is made separately for each subgroup or standalone Entity subject to a separate QDMTT calculation, and this result is for one such unit. Based on what you supplied.

Decided by the election

A QDMTT subject to challenge

The QDMTT meets the standards but is subject to a challenge, so it is not payable and the election cannot be made.

Computed

The QDMTT Safe Harbour is not available as computed: a Filing Constituent Entity can elect it only where the Top-up Tax computed under the QDMTT would be a Qualified Domestic Minimum Top-up Tax payable under Article 5.2.3, and you have indicated this QDMTT is subject to a challenge or deemed not assessable. That does not affect whether the QDMTT meets the standards, but the election is unavailable for these Entities.

Decided by the qdmtt must be payable

The Switch-off Rule

The QDMTT is payable and meets the standards but the group must apply the Switch-off Rule.

Computed

The QDMTT Safe Harbour is not available as computed: where the group is required to apply the Switch-off Rule for the QDMTT jurisdiction, the Filing Constituent Entity shall not make the election, and the group switches to the credit method for the QDMTT under Article 5.2.3 for the Constituent Entities concerned. Based on what you supplied.

Decided by the switch-off rule

Available but not elected

Every condition is met but no election has been made.

Computed

The QDMTT Safe Harbour is available but has not been elected as computed: the QDMTT meets the standards, it is payable and the Switch-off Rule does not apply. Article 8.2.1 applies the safe harbour at the election of the Filing Constituent Entity, made for each subgroup or standalone Entity, so until it is made the Top-up Tax falls to be computed under the ordinary rules. Based on what you supplied.

Decided by the election

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:

  • Has the Inclusive Framework's peer review found that the jurisdiction's QDMTT meets the safe harbour standards — the Accounting, Consistency and Administration Standards in Box 3.1?

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