ETR Calculation Flow
The calculator processes each declared jurisdiction following the rules defined in Articles 5.1 to 5.5 of the OECD Model Rules (Pillar Two) and the Guidance for First Filings (June 2026).
1. Fiscal year determination
The fiscal year is taken from FilingInfo.Period.Start. Transitional SBIE rates are only defined for 2023-2033. If the year is outside this range, the nearest endpoint is used. (Art 9.2)
2. Safe Harbour (pre-calculation checks)
Three safe harbours are evaluated before computing the ETR. If any applies, the top-up tax is set to zero and the remaining calculation is skipped:
De Minimis (Art 5.5)
If ETRException.Basis = GIR2901 and the 3-year average GloBE revenue is below 10M EUR and net income below 1M EUR, the top-up tax is zero. Averages are auto-calculated from financial data if empty.
Transitional CbCR (Art 8.2)
If CbCR data exists (Revenue, Profit, IncomeTax) and Profit <= 0, or the simplified ETR IncomeTax/Profit exceeds the minimum rate (15% until 2024, 16% in 2025, 17% from 2026), the top-up tax is zero.
UTPR (Art 9.3 + Guidance Issue 12)
If the nominal corporate tax rate is >= 15%, the UTPR rule does not apply.
3. CE data aggregation
For each Constituent Entity (CE) in the jurisdiction, totals are recalculated from sub-tables and accumulated at jurisdictional level:
CEComputation -> AdjFANIL_Total (Art 3.2, 7.1, 7.2)
CEComputation -> NetGlobeInc_Total (Art 3.2, 3.3)
CEComputation -> AdjCoveredTax_Total (Art 4.1.2, 4.3, 4.4)
Jurisdictional totals are obtained by summing all CEs:
(Art 5.1.1, 5.1.2)
4. Taxpayer elections
Four elections affect the calculation. When active, the calculator respects manual values entered by the user: (Arts 3.2.5, 3.2.6, 4.5, 4.6.1)
- Art3.2.5 (Realisation): user adjusts NetGlobeIncome manually
- Art3.2.6 (Asset gain): user adjusts NetGlobeIncome manually
- Art4.5 (GloBE loss): user adjusts AdjCovTax manually
- Art4.6.1 (Post-filing): adds post-filing adjustments to CoveredTaxes
5. SBIE (Substance-Based Income Exclusion)
The substance-based income exclusion reduces the taxable base. It is calculated from payroll costs and tangible assets entered by the user, multiplied by the transitional rates in Art 9.2: (Art 5.3.2 + 9.2)
| Year | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Payroll | 10.0% | 9.8% | 9.6% | 9.4% | 9.2% | 9.0% | 8.2% | 7.4% | 6.6% | 5.8% | 5.0% |
| Assets | 8.0% | 7.8% | 7.6% | 7.4% | 7.2% | 7.0% | 6.6% | 6.2% | 5.8% | 5.4% | 5.0% |
If the user has activated Art5.3.1 (SBIE opt-out), SBIE is set to zero.
6. ETR and TopUpTax calculation
OverallComputation -> ETRRate (Art 5.1.1 + Guidance Issue 14)
OverallComputation -> TopUpTaxPercentage (Art 5.2.1)
OverallComputation -> ExcessProfits (Art 5.2.2)
OverallComputation -> TopUpTax (Art 5.2.3)
Additional top-up tax (Art 4.1.5) is calculated when NetGloBE is negative:
7. Writing results
Calculation results are written to OverallComputation: FANIL, AdjustedFANIL, NetGlobeInc, IncomeTaxExpense, AdjCovTax, ETRRate, TopUpTaxPercentage, ExcessProfits, TopUpTax and SubstanceExcl_Total. Values are written in Edit mode if the table already exists, or Append mode if this is the first calculation.
Coherence validation
The ValidarCoherenciaETR function runs the same calculation in read-only mode and compares results against stored values. If the difference exceeds 1%, a warning is recorded in tValidationError. It is available from the Utilities > Validate ETR coherence menu.