GloBE Rules

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).