Pillar Two Top-Up Tax Calculator
Calculate your OECD GloBE top-up tax when a jurisdiction's effective tax rate falls below the 15% global minimum. Applies to multinational enterprises with consolidated revenue ≥ €750 million.
Pillar Two — OECD GloBE Global Minimum Tax
Applies to MNEs with consolidated revenue ≥ €750,000,000 in at least 2 of the 4 preceding fiscal years. Top-up tax = (15% − ETR) × GloBE Income when ETR < 15%. This calculator provides a simplified jurisdictional estimate.
Formula
ETR = Covered Taxes ÷ GloBE Income
Top-Up Tax = max(0, (15% − ETR) × GloBE Income)
Adjusted financial accounting income for the jurisdiction.
Income taxes paid or accrued that count toward GloBE ETR.
What is Pillar Two (GloBE)?
Pillar Two is the second pillar of the OECD/G20 BEPS 2.0 project. It introduces a 15% global minimum effective tax rate for multinational enterprises (MNEs) with consolidated group revenue of at least €750 million in at least two of the four preceding fiscal years.
The Global Anti-Base Erosion (GloBE) rules ensure that each jurisdiction where an MNE operates has an ETR of at least 15%. If a jurisdiction's ETR falls below this threshold, a top-up tax is collected — either by the parent entity's jurisdiction (IIR), by other group entities' jurisdictions (UTPR), or by the source jurisdiction itself (QDMTT). The EU implemented Pillar Two via the Minimum Tax Directive (2022/2523), with IIR in effect from 2024 and UTPR from 2025.
The Pillar Two Formula
ETR = Covered Taxes ÷ GloBE Income
Top-Up Tax = max(0, (15% − ETR) × GloBE Income)
When ETR is at or above 15%, no top-up tax is due. When ETR is below 15%, the shortfall (15% − ETR) is multiplied by GloBE income to determine the top-up amount.
Worked example
GloBE Income: €1,000,000 · Covered Taxes: €100,000
ETR = €100,000 ÷ €1,000,000 = 10%
Top-Up = (15% − 10%) × €1,000,000 = €50,000
GloBE Income and Covered Taxes
GloBE income is the financial accounting net income or loss of a constituent entity, with specific adjustments under the OECD Model Rules — including net taxes expense, dividends, equity gains/losses, excluded equity gains, and others.
Covered taxes are income taxes paid or accrued in the jurisdiction. Not all taxes are covered; the GloBE rules include detailed provisions on deferred tax adjustments, qualified refundable tax credits, and excluded dividends.
Substance-Based Income Exclusion (SBIE / Carve-Out)
Real Pillar Two calculations reduce GloBE income by the substance-based income exclusion before computing top-up tax. The SBIE excludes routine returns on real economic activity:
Payroll carve-out: 10% of eligible payroll costs (transitional; declines to 5% by ~2033)
Tangible assets carve-out: 8% of eligible tangible asset book value (declines to 5% by ~2033)
De Minimis Exclusion (Article 5.5 GloBE Model Rules)
A jurisdiction is entirely excluded from top-up tax if the MNE group's average GloBE Revenue in that jurisdiction is below €10 million AND the average GloBE Income or Loss is below €1 million, averaged over the current and two preceding fiscal years. This simplification calculator does not apply these carve-outs or the de minimis exclusion — consult qualified tax advisors for full GloBE compliance calculations.
IIR, UTPR, and QDMTT
IIR — Income Inclusion Rule
The parent entity's jurisdiction taxes low-taxed income of constituent entities. The IIR is the primary collection mechanism and applies at the top of the corporate group structure.
UTPR — Undertaxed Profits Rule
Where IIR does not fully collect the top-up tax (e.g. the parent is in a non-implementing jurisdiction), other group entities in implementing jurisdictions can be subject to UTPR — which denies deductions or imposes an equivalent charge.
QDMTT — Qualified Domestic Minimum Top-up Tax
The source jurisdiction imposes its own domestic minimum top-up tax on its low-taxed constituent entities. A QDMTT is credited against IIR/UTPR due in other jurisdictions, meaning the top-up stays in the source country.
Frequently Asked Questions
Revenue threshold
Consolidated revenue ≥ €750M
In at least 2 of the 4 preceding fiscal years
Exclusions
Government entities, international organisations, pension funds, investment funds (in certain cases), and real estate investment vehicles.
15%
Effective tax rate per jurisdiction
Top-up tax applies when jurisdictional ETR falls below 15%. The minimum rate has been set at 15% under the OECD agreement.