KPMG report: Accounting questions related to new GloBE rules

A KPMG report concerning accounting questions related to new GloBE rules

A KPMG report concerning accounting questions related to new GloBE rules

Accounting for the new global anti-base erosion (GloBE) rules is proving to be a challenge, and stakeholders have raised questions—including whether the top-up tax under the GloBE rules is within the scope of the income tax accounting standards under U.S. Generally Accepted Accounting Principles (GAAP) and IFRS® Accounting Standards (ASC 740 and IAS 12, respectively), as well as the accounting for temporary differences.


The GloBE rules apply to multinational enterprises (MNE) with consolidated group revenue exceeding €750 million in at least two out of the last four years.

Key effects

  • The GloBE rules subject MNEs to at least the minimum rate of 15% of income arising in each jurisdiction in which they operate. A top-up tax would arise only if a group pays an insufficient amount of income taxes at the jurisdiction level.
  • The GloBE top-up tax is in the scope of ASC 740 and IAS 12 for US GAAP and IFRS Accounting Standards, respectively.
  • Under U.S. GAAP, the GloBE top-up tax is accounted for as an alternative minimum tax. Companies do not need to record GloBE-specific deferred taxes or remeasure existing deferred taxes under local regular income tax systems to the GloBE rate. Instead, they must recognize the incremental effect of the GloBE top-up tax as incurred.
  • Under IFRS Accounting Standards, the International Accounting Standards Board proposed amendments to IAS 12, which would introduce a temporary mandatory exception from accounting for deferred tax and provide new required disclosures. 

Read a February 2023 report [PDF 256 KB] prepared by KPMG LLP that examines (1) calculating the top-up tax, (2) complexities in the accounting for the top-up tax, and (3) accounting for the top-up tax.


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