What is Top-up Tax?

Top-up tax is a mechanism intended to ensure that MNEs pay a minimum ETR of 15% in each jurisdiction in which they operate. Based on GloBE Rules, the ETR is the total covered taxes divided by the total profit in the jurisdiction. If the MNE’s ETR goes below the minimum in a jurisdiction, a top-up tax amount will be imposed to bring it up to 15%. This top-up tax can be collected through several mechanisms, including Multinational Top-Up Tax (MTT) and Domestic Top-Up Tax (DTT).

A - MAIN REFERENCE MATERIALS

• Model GloBE Rules (Published 20/12/2021)
• Commentary to the GloBE Rules :
• First Edition (Published 14/03/2022)
• Consolidated Commentary (2023) (Published 25/04/2024)
• Consolidated Commentary to Model GloBE Rules (Published 09/05/2025)
• Agreed Administrative Guidance (AAG):
• Safe Harbours and Penalty Relief (Published 20/12/2022)
• AAG published on 02/02/2023
• AAG published on 17/07/2023
• AAG published on 18/12/2023
• AAG published on 17/06/2024
• AAG published on 15/01/2025 (Article 8)
• AAG published on 15/01/2025 (Article 9)
• AAG published on 05/01/2026 (Side-by-Side Package)^New!
• Guidance on the GloBE Information Return (GIR):
• Guidance published on 17/07/2023
• Guidance published on 15/01/2025 
• GIR (Pillar Two) XML Schema

B - SUPPLEMENTARY REFERENCE MATERIALS

• Summary : Pillar Two Model Rules in A Nutshell
• Pillar Two Model Rules Fact Sheets
• Minimum Tax Implementation Handbook (Published 11/10/2023)
• Illustrative Examples-Updated (Published 02/05/2025)

FOR RELATED GMT ISSUES, PLEASE CONTACT US :

tf2p@hasil.gov.my