The Organisation for Economic Co-operation and Development (OECD), together with the G-20 Inclusive Framework, updated the rules for implementing the global minimum tax, or Global Anti-Base Erosion (GloBE) rules, on September 11, 2026. The updates include revisions to the GloBE Information Return (GIR), guidance on explicitly conditional taxes, the Qualified Domestic Minimum Top-up Tax (QDMTT) Safe Harbour for differences in accounting periods, and a methodology for conducting full legislative reviews of Pillar Two rules in each jurisdiction.
The changes are relevant to Indonesia as the global minimum tax regime has been implemented through Minister of Finance Regulation No. 136 of 2024 (PMK 136/2024) and Director General of Taxes Regulation No. PER-6/PJ/2026.
GIR Revisions
The GIR is a standard return used by multinational enterprise (MNE) groups to report information on effective tax rate (ETR) calculations, top-up tax, and the use of safe harbours.
In the September 2026 revisions, the OECD incorporated reporting simplifications previously agreed under the side-by-side (SbS) package in January 2026. The new format accommodates several safe harbours, including the simplified ETR safe harbour, substance-based tax incentive (SBTI) safe harbour, side-by-side safe harbour, and ultimate parent entity (UPE) safe harbour.
For MNEs that meet the relevant requirements, these simplifications can reduce the amount of data that must be reported in relation to the income inclusion rule (IIR) and undertaxed profits rule (UTPR). However, reporting requirements relating to the QDMTT generally remain in place.
The revised GIR applies to fiscal years beginning on or after December 31, 2025. The OECD has also retained transitional simplified jurisdictional reporting for certain transition periods.
The GIR revisions are accompanied by an updated XML schema used for information exchange. The GIR is submitted through an electronic information exchange system under the multilateral competent authority agreement on the exchange of GloBE Information (GIR MCAA).
The OECD has developed a new XML schema to reflect changes to the GIR structure. MNEs need to ensure that their enterprise resource planning (ERP) systems and tax software can generate data in the required format.
System adjustments are necessary because data validation failures could delay GIR submissions. The data used for reporting must also be reconciled with the company’s financial statements and tax data.
Administrative Guidance
The September 2026 administrative guidance provides rules on explicitly conditional taxes.
These are domestic taxes whose application depends on a constituent entity’s exposure to a qualified IIR or qualified UTPR in another jurisdiction, or on the availability of the side-by-side safe harbour.
The OECD excludes such taxes from covered taxes to prevent jurisdictions from imposing taxes that effectively absorb top-up tax that should otherwise be collected by another jurisdiction.
However, the use of the EUR 750 million consolidated revenue threshold does not automatically make a tax an explicitly conditional tax. The determination depends on whether domestic legislation links the imposition of the tax to the application of an IIR or UTPR in another jurisdiction.
The classification has a direct impact on ETR calculations. Taxes that meet the criteria for explicitly conditional taxes cannot be treated as covered taxes and therefore cannot be included in adjusted covered taxes as the numerator in the ETR calculation.
Such taxes are also excluded from the net taxes expense adjustment used to determine GloBE income. Accordingly, the conditional tax is not added back to financial accounting net income or loss.
For example, assume an entity has accounting profit before tax of 100, covered taxes of 10, and an explicitly conditional tax of 5. Its accounting net income would be 85. For GloBE purposes, only the 10 in covered taxes would be added back, resulting in GloBE income of 95.
With adjusted covered taxes of 10, the ETR would be 10.53%. If no exclusion or safe harbour applies, the ETR would be below the 15% minimum rate, resulting in top-up tax of 4.25.
The treatment also depends on the legal structure of the domestic tax. If the conditional element is imposed as a severable surcharge, the standard corporate tax component may remain a covered tax while the surcharge is excluded. If the conditional element cannot be separated from the tax regime, the entire tax may be disqualified as a covered tax.
The OECD also provides transitional rules for conditional taxes that were in place before the new rules took effect, subject to certain requirements concerning the timing of enactment and changes to the nature of the tax.
The administrative guidance also provides clarification on the application of the QDMTT safe harbour when the accounting period of a local entity differs from the fiscal year of the ultimate parent entity (UPE).
The OECD has established a dual testing requirement for such cases. An entity must satisfy the QDMTT safe harbour requirements for each required QDMTT Fiscal period that begins during the UPE’s fiscal year. Testing must also be conducted for each local period that ends during the UPE’s fiscal year.
Failure to meet the requirements for any relevant period may result in the safe harbour being unavailable for that UPE fiscal year.
For fiscal year 2024, the Inclusive Framework has provided transitional relief. The QDMTT safe harbour may be applied based on local periods beginning in that year, provided the specified requirements are met. The relief remains subject to the switch-off rule where a restructuring takes advantage of differences in accounting periods to avoid tax.
In addition to the technical guidance, the OECD has formalized the Terms of Reference and Assessment Methodology for the Full Legislative Review. The framework marks the end of the self-assessment stage and the start of a peer review process for Pillar Two legislation across jurisdictions.
The review covers domestic rules implementing the IIR, UTPR, and QDMTT. The rules will be assessed against the agreed GloBE Model Rules, Commentary, and administrative guidance.
The review aims to identify inconsistencies in domestic legislation that could affect tax calculations or create related benefits that are inconsistent with the GloBE rules.
Jurisdictions that enacted Pillar Two legislation before April 1, 2025, including Indonesia, will have a three-year transition period to implement corrective recommendations before the review findings affect their qualified status.
If a jurisdiction fails to implement the recommended corrections, its qualified status may be withdrawn. This could allow other jurisdictions to impose top-up tax through the IIR or UTPR.
Compliance in Indonesia
In Indonesia, Pillar Two applies to constituent entities of an MNE group that meets the EUR 750 million consolidated revenue threshold in at least two of the four fiscal years preceding the GloBE tax year.
The IIR and domestic minimum top-up tax (DMTT) took effect on January 1, 2025, while the UTPR took effect on January 1, 2026.
PMK 136/2024 was subsequently supplemented by PER-6/PJ/2026, which sets out the administrative procedures for Pillar Two. Taxpayers meeting the criteria must register as GloBE taxpayers no later than nine months after the end of their first GloBE tax year.
For payment purposes, top-up tax must be settled in accordance with Indonesian tax administration rules. The deposit code (KJS) varies depending on the applicable tax mechanism. The IIR uses KJS 610, the UTPR uses KJS 620, and the DMTT uses KJS 630. All three use Tax Account Code (KAP) 411618.
Reporting consists of the annual GloBE corporate income tax return and the GIR. The annual GloBE corporate income tax return must be submitted no later than four months after the end of the GloBE tax year. An extension of up to two months may be granted subject to the applicable requirements.
Meanwhile, the GIR and notification document generally must be submitted no later than 15 months after the end of the GloBE tax year. For the 2025 GloBE tax year, the initial filing deadline has been extended to 18 months, or until June 30, 2027.
Indonesian administrative rules also allow simplified reporting under certain conditions. A constituent entity in Indonesia whose UPE has filed a GIR with the tax authority in its jurisdiction of residence and is covered by an automatic exchange mechanism under the MCAA may use the global GIR electronic receipt in accordance with the applicable rules.
The OECD updates mean companies need to adjust their compliance systems and procedures. ERP systems and tax software must be capable of generating data in accordance with the latest XML schema. Companies also need to ensure that their tax classifications, accounting periods, asset data, labour costs, and consolidated financial information are consistent with GloBE requirements.
Companies benefiting from tax holidays or other tax incentives also need to reassess the potential impact. Incentives that cause the ETR to fall below 15% may give rise to a top-up tax liability. In Indonesia, the DMTT allows the right to tax such top-up tax to be exercised domestically, provided the requirements for a qualified DMTT are met.
With the September 2026 GIR revisions and administrative guidance, Pillar Two implementation is entering a phase that places greater emphasis on consistency between domestic rules, financial data, information technology systems, and GloBE standards. For MNEs operating in Indonesia, system and procedural adjustments should be made before the reporting and payment obligations for the next period fall due.
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