Step-by-step computation for Macro-step 1

Purpose

The purpose of the Scope and Perimeter analysis is to construct the GloBE perimeter by identifiying all the Constituent Entities and fixing their legal characteristic, thus allowing further treatment. It also allows to define the different sub-groups and sub-perimeters (JVs, MOMNEs, Investment entities...) in each jurisdiction that will be the basis of the next computational steps.

General Logic

In order to perform the Perimeter analysis a serie of computations on the shareholding graph needs to be perform. This will allow to finalize the direct and indirect ownership interests as well as the controlling interest necessary to draw the limits of the different sub-perimeters. Moreover a series of graph transversal will be necessary to qualify certain entities as member of Joint Ventures, Excluded Entities and or Investment entities.

Data Input

The Data input for Macro-step 1 consists in :

• The list of all potential entities and their characteristics;
• The list of all direct shareholdings and their characteristics or the ownership and controlling interest links

The detailed matrix is available in the relevant section of the Pillar 2 Data Structure.

Data Output

The Data output for Macro-step 1 consists in :

• The final characterization of each Constituent Entity and out of group entity with regard to GloBE rules, ready for input in the GIR;
• The final ownership and controlling interest matrices for use in Macro-step 3.'s re-allocations and various elections, as well as the Charging Mechanisms of Macro-step 5
• The final list of JVs and Minority-Owned sub-groups in each Jurisdictions as well as groups of Investment entities

The detailed matrix is available in the relevant section of the Pillar 2 Data Structure.

Detailed Step by step approach

Step 1.5. - Definition of the MNE Group

Case 1 : Using Controlling interests and consolidation method

UPE identification : entity with

• consolidation "full"
• no parent entity with
  • controlling interest in it
  • and consolidation method
    • full/proportional/equity
    • or not consolidated for reasons in article 1.2.2.b) "size or materiality grounds"/, or "is held for sale"

Entity is part of the MNE Group if :

• UPE has Controlling interest in the entity
• and consolidation method
  • full/proportional/equity
  • or not consolidated for reasons in article 1.2.2.b) "size or materiality grounds"/, or "is held for sale"

Step 1.9. - Specific CE treatments

Investment entity identification