We thank you for the opportunity to submit our comments on the GloBE Information Return (GIR).

We appreciate that the three documents released in December 2022, "Safe Harbours and Penalty Relief," "Pillar Two - GloBE Information Return" and "Pillar Two - Tax Certainty for the GloBE Rules" provide some practical information to help taxpayers implement the GloBE Rules (hereinafter "the Rules"). However, there are still issues that impose significant administrative burdens on MNE Groups and to be clarified for taxpayers to fully prepare for the unprecedented Rules.

Accordingly, we would like to present our views on these issues. We understand that the Administrative Guidance will be published in a series in the future, and we welcome the opportunity to contribute to the smooth implementation of the Rules by providing our comments.

1. Treatment of the GIR across jurisdictions (paras. 15 and 16)

We support a single point of filling by the ultimate parent entity (UPE) or designated filing entity (para. 15). On the other hand, as discussed below, the information in the GIR includes each Constituent Entity (CE) in each jurisdiction. Since the information related to CEs is commercially highly sensitive, uncontrolled dissemination to each jurisdiction and use for purposes other than implementation of the Rules is unacceptable from a business standpoint.

Therefore, in relation to segmentation (paras. 14 and 18), it should be made mandatory that a Qualifying Competent Authority Agreement be concluded between all jurisdictions implementing the Rules, and under requirements pertaining to appropriate confidentiality protection, the information in the GIR should be classified and only information necessary for administration in relevant jurisdictions exchanged (Limitation of Scope). We emphasise that the exchange of information to jurisdictions where top-up taxation does not arise is unnecessary. For example, the information in section 3 of Annex A1 could be exchanged in a manner limited only to the relevant jurisdictions.

In addition, information exchanged between jurisdictions should not be used for any purpose other than the implementation of the Rules (Limitation of use). It is unacceptable to change the information to be reported or the GIR format by the domestic law in a single jurisdiction beyond the framework agreed in the OECD/IF.

Further information may be requested for risk assessment and other purposes (para. 16), which would result in confusion in practice. Consideration should first be given to conducting risk assessment, including confirmation of effective tax rates, through existing country-by-country reporting (CbCR).

In cases where the GIR is filed by the UPE or designated filing entity (filing entity), inquiries from relevant tax administrations should also be centralised to the filing entity via the tax administration in the jurisdiction where the filing entity is located (Limitation of inquiry route). Correspondingly, the tax administrations making inquiries should be limited to those with top-up taxation rights under a qualified IIR and a qualified UTPR.

2. Information to be included in the GIR (para 5, Annex A1)

While we welcome the standardisation of the information to be provided for the GIR, there are many MNE Groups with hundreds or even thousands of CEs. For example, if each CE is to file about 7 pages, the total number of the MNE Group's GIR could be 7,000 pages, which provokes a serious concern that this may exceed the allowable limits of electronic filing of the tax administration which receives the GIR.

Under these circumstances, requiring detailed information (Annex A1 3.4) for each CE would not only impose an excessive administrative burden on taxpayers, but would also be a practical hindrance to tax administrations. Therefore, the unit of GIR and the granularity of information should be differentiated by jurisdiction according to the likelihood of occurrence of top-up taxation. Comprehensively requiring information on a CE-by-CE basis, even for jurisdictions where top-up taxation does not arise, would be an excessive burden in practice and would be unacceptable.

For jurisdictions subject to permanent Safe Harbours (SHs), jurisdictions subject to the QDMTT, and jurisdictions where the statutory tax rate is clearly much higher than 15%, the filing of detailed information should be exempted, including Annex A1 3.3, or at least information should be filed on a jurisdiction-by-jurisdiction basis. One possible option would be to move information regarding SHs and de minimis exemptions before 2.2, and if SHs are applied, then no further information would be required to be filed.

With respect to jurisdictions in which top-up taxes arise, an election could be made under the Rules to eliminate transactions between CEs in a tax consolidation group in the same jurisdiction (the Model Rule 3.2.8 and Commentary Chapter 3, para.133). Provided that there is a possibility to elect to calculate the effective tax rate by jurisdiction on a consolidated tax basis to reduce the administrative burden, it is appropriate that data on a tax consolidation group should form the basis for GIR and tax returns, without any other requirements.

Information on CEs and JV group members (CE, etc.) (Annex A1 2.2, 2.3) should be omitted, since Entity Lists are attached to the CbCR and Master File. It should be clarified that (1) when there is a change from the previous fiscal year in the information on a CE, etc. or when a CE, etc. is no longer within a group, and (2) when a CE, etc. was outside a group in the previous fiscal year but becomes a member of the group in the current fiscal year, clear instructions should be provided. As for 2.3, one option is to make such information unnecessary in the GIR, since it may lead to increasing administrative burdens as described below.

Moreover, we would like to confirm whether it is acceptable to only include the MNE Group's CEs in the GIR if there are multiple parent entities holding interests in Low Tax Constituent Entities (LTCEs) (Annex A1 4.1.2).

We understand that a diagram for the corporate structure of the MNE group is not required (Annex A1 2.).

Other possible options for simplification and clarification with respect to Annex A1 are as follows:

• With respect to 2.2.1 Constituent Entities and members of JV Groups, Annex A1 may be simplified by indicating only the number of Entities and TIN number.
• With regards to 2.3 Changes in the corporate structure that occurred during the Reporting Fiscal Year, we are concerned that the proposed tabular format would entail too many personnel-hours when M&A or post-merger integration (PMI) is being conducted. For this reason, we propose an election to replace the tabular format by attaching a chart of capital relationships at the beginning and end of the fiscal year, or to allow reorganisation to be summarised in a separate table.
• As for 3.2.1 Safe harbour jurisdiction elections, a fifth row should be added to enter the value of the simplified ETR for the jurisdiction in question. In relation to the Routine profits test, the value in 3.3.1.3 (a) should be available for reference.
• It should be unnecessary to enter the values for each past fiscal year in b. c. of 3.2.2 Election for de minimis exclusion. At a minimum, it should be clarified that GloBE Revenue and GloBE Income (or Loss) prior to the Transition Year of the Rules need not be completed.
• With respect to 3.3.2.1 (b) Breakdown of the adjustments, since it is assumed that (b), (c), and (g) in the table are aggregated on a net basis in practice, it should be possible to include multiple items in an aggregated form.
• With regard to 3.4.1 (a) Adjustments to the Financial Accounts Net Income or Loss, 3.4.2 (a) Adjustments to the Current tax expense in the Financial Accounts, and (c) Deferred tax expense, it is appropriate to enter the net amount from the perspective of administrative burden.

3. Relationship between SH and GIR

In cases where the transitional SH is applied, it is unnecessary to fill in the information on CEs, etc. in Section 3 of Annex A1 (Annex A2 Note 3.2.1). However, the explanation in Note 3.2.1 is difficult to understand, and we request that a supplementary explanation be provided with specific examples. Moreover, when the SH is applied, the omission of information for each CE in Annex A1 2.2 and 2.3 should also be permitted.

When permanent SHs are designed, the GIR format should be reviewed and detailed and early guidance should be provided on the description procedure. In order to reduce administrative burdens, the GIR should minimise the number of adjustment items for SHs and clearly state which items are no longer required to include in the GIR when SHs are applied. Moreover, the information related to the determination process for the application of SHs needs to be minimised. Although it is stated that the Additional Current Top-up Tax should not be zero ("Safe Harbours and Penalty Relief" para. 82), from the perspective of simplification, it would be appropriate to exempt the calculation of the Additional Current Top-up Tax from the GIR. Even if this is not possible, guidelines on how to describe the tax in the GIR should be presented. With respect to the simplified ETR test ("Safe Harbours and Penalty Relief" para. 86), we would like to confirm whether dividends received corresponding to Excluded Dividends in the adjustments to the GloBE Income or Loss (Model Rule 3.2.1 (b)) are deducted in the simplified ETR calculation.

The permanent SH should provide both taxpayers and authorities with clear and objective requirements for its application and should not leave room for all relevant jurisdictions to challenge its application if the requirements are satisfied.

4. Others

For QDMTT, only the financial accounting standards and tax amounts are listed in the GIR (Annex A1 3.3.1.5.). Clear instructions should be provided as to whether the value to be entered here is the final or estimated QDMTT tax amount in the relevant jurisdiction. We would also like to confirm whether the OECD plans to standardise the information and forms required for the filing of QDMTT in each jurisdiction. Consideration should be given to aligning the deadline for filing and format with the GIR as much as possible.

It would be useful when preparing for GIR to provide various practical examples of calculations by setting up numerical model cases for MNE Groups to prevent calculation errors, etc. In particular, as there is no specification regarding the linkage of figures between tables across sections, it is also essential to specify areas where the figures should be consistent.

<Example> The following two items are considered to be consistent.

<1> 3.3.1.2. Computation of Adjusted Covered Taxes
 ∟ Aggregate Current tax expense with respect to Covered Taxes after allocations in Article 4.3 (All CEs in the jurisdiction)
 ∟ (P) Total Deferred Tax Adjustment Amount - Article 4.1.1(b)

<2> 3.3.2.1. Deferred Tax adjustments
 ∟ (a) High-level summary
 ∟ Total Deferred Tax Adjustment Amount

Furthermore, from a practical standpoint, we would like to request that an input format in Excel or on a website be prepared. While the CbCR is submitted in XML format, multiple format options, such as CSV files (using the Excel format), should be ensured for the convenience of taxpayers.