The US Treasury has welcomed the OECD’s revised **GloBE Information Return (GIR)**, released on 11 September 2026.
The revised return gives US-headquartered multinational groups the mechanism to elect the **Side-by-Side safe harbor**. This is designed to prevent those groups from facing overlapping foreign Pillar Two taxes alongside US global minimum tax rules.
For international sellers with operations in the UK, EU, Canada, Australia, or the USA, this update changes how global minimum tax reporting should be organised.
## What changed on 11 September 2026?
The revised GIR implements an important part of the Side-by-Side package agreed by more than 145 countries in January 2026.
For eligible US-headquartered groups, the safe harbor is intended to ensure that they remain subject to US global minimum taxes rather than overlapping foreign Pillar Two cross-border taxes.
The revised GIR now:
– Adds a field for a US-headquartered company to elect the Side-by-Side safe harbor.
– Exempts qualifying electing companies from Pillar Two’s **Income Inclusion Rule (IIR)** and **Undertaxed Profits Rule (UTPR)**.
– Provides specific exemptions from certain GIR reporting requirements after the election.
– Standardises reporting for local minimum taxes.
– Limits information sharing for local minimum-tax purposes to the relevant jurisdiction.
– Allows foreign-headquartered companies operating in the USA to protect qualifying substance-based tax incentives, including the US Research and Development tax credit, from Pillar Two top-up taxes.
The US Treasury described the change as a way to reduce duplicated compliance work while preserving US tax sovereignty.
You can read the [official US Treasury announcement](https://home.treasury.gov/news/press-releases/sb0628) and the [OECD GloBE Information Return publication](https://www.oecd.org/en/publications/tax-challenges-arising-from-the-digitalisation-of-the-economy-globe-information-return-september-2026_0f9da895-en.html).
## How the Side-by-Side safe harbor affects US groups
The main benefit is the potential removal of overlapping IIR and UTPR exposure for an eligible US-headquartered group.
Previously, a US parent with subsidiaries or branches in London, the EU, Toronto, Sydney, or other locations could face complex Pillar Two calculations across several jurisdictions. The group might also need to provide detailed information about operations, tax rates, income, and covered taxes in each country.
The revised GIR is intended to streamline this process.
However, the safe harbor is not simply an automatic exemption. Your group must:
1. Confirm that the ultimate parent company is US-headquartered.
2. Check whether the relevant US regime qualifies under the Side-by-Side framework.
3. Complete the revised GIR correctly.
4. Make the election through the required reporting mechanism.
5. Continue reviewing local minimum-tax and other domestic filing obligations.
6. Retain records supporting the group structure, financial data, and election.
**Do not stop your compliance process because the safe harbor is available.** The election itself creates a reporting requirement, and local rules may still require information or tax filings.
## Example: A UK ecommerce group with a US parent
Imagine a US-headquartered ecommerce group with:
– A parent company in Delaware.
– A fulfilment company in the UK.
– Sales and VAT registrations in Germany and France.
– A Canadian subsidiary.
– Australian marketplace activity.
The group may have previously needed to assess how Pillar Two rules in multiple territories could interact with US global minimum tax rules.
Under the revised GIR, the US parent may be able to elect the Side-by-Side safe harbor. If the group qualifies and makes the election correctly, the IIR and UTPR should not apply to the group under the safe harbor framework.
The group would still need to maintain reliable records across the USA, UK, EU, Canada, and Australia. It may also need to address:
– UK corporation tax and statutory accounts.
– EU VAT registrations and periodic VAT returns.
– Canadian corporate tax and sales tax obligations.
– Australian GST and company reporting.
– Local minimum-tax requirements where applicable.
– Intercompany transactions and cross-border payment records.
The practical benefit is not the elimination of all international compliance. It is a more structured route for separating US global minimum tax treatment from local VAT, GST, sales tax, and other filing obligations.
## Example: Foreign founders operating through a US LLC
A second example involves founders based in London, Toronto, Melbourne, or another country who operate through a US LLC.
A US LLC does not automatically mean that the business is an in-scope multinational group for Pillar Two purposes. Many smaller businesses will not meet the relevant group size or scope conditions.
The first step is therefore to establish whether the business is within the GloBE rules at all.
If it is not, the revised GIR may not apply. The business may instead need to focus on:
– US federal income tax filing.
– Estimated tax payments.
– State sales tax registration and returns.
– Information reporting.
– UK, Canadian, Australian, or EU obligations linked to the founders and trading activity.
– VAT, GST, or sales tax on cross-border customer sales.
If the business is part of a larger multinational group, however, the group should review whether the revised GIR and Side-by-Side election apply at parent-company level.
**Classify the entity before assuming the relief applies.** This will prevent you from overlooking ordinary US filing and payment obligations.
## Foreign-headquartered companies may benefit from R&D credit protection
The revised GIR also addresses companies headquartered outside the United States.
A foreign-headquartered group operating in the USA may have US research and development activity and claim the US R&D tax credit. The revised rules allow taxpayers to apply protections for qualifying substance-based tax incentives that formed part of the Side-by-Side package.
This could be relevant to:
– SaaS businesses with US engineering teams.
– Digital agencies developing proprietary software.
– Ecommerce groups operating US product or technology centres.
– Canadian or UK companies with US research functions.
– Australian businesses expanding their technology operations into Washington DC or other US locations.
You should not assume that every R&D credit is automatically protected. Review the group’s structure, activities, credit calculations, and applicable implementation rules before completing the GIR.
## Keep your underlying data ready
The revised GIR may reduce duplicative reporting. It does not remove the need for accurate accounting data.
Prepare the following information:
– Group legal structure and ownership percentages.
– Ultimate parent company details.
– Entity-by-entity revenue and profit figures.
– Jurisdictional tax paid and tax accrued.
– Payroll and tangible-asset information.
– Details of US R&D activity and credits.
– Intercompany transactions.
– VAT, GST, and sales tax registrations.
– Local minimum-tax filings and payment records.
– Pr
