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May 15, 2026

Article 1 defines the scope of the Top-up Tax, applying to Constituent Entities of MNE Groups with annual revenues of EUR 750 million or more in at least two of the four preceding fiscal years. It provides essential definitions for MNE Groups, Constituent Entities, and Ultimate Parent Entities (UPE). Crucially, it identifies Excluded Entities, such as governmental bodies, international organisations, and pension funds, which are generally exempt. The article also establishes specific rules for sovereign wealth funds and entities held by non-profit organisations, ensuring alignment with international Pillar Two standards.

Cases, Provisions, Conditions, Rules, Controls, and Procedures on the Imposition of Top-up Tax on Multinational Enterprises Attached to Cabinet Decision No. 142 of 2024

Article 1 - Scope of Application

Article 1.1. Scope of this Decision

1.1.1 This Decision shall apply to Constituent Entities that are members of an MNE Group that has annual revenue of EUR 750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. Further rules are set out in Article 6.1 which modify the application of the consolidated revenue threshold in certain cases.

1.1.2 If one or more of the Fiscal Years of the MNE Group taken into account for purposes of Article 1.1.1 is of a period other than 12 months, for each of those Fiscal Years the EUR 750 million threshold is adjusted proportionally to correspond with the length of the relevant Fiscal Year.

Article 1.2. MNE Group and Group

1.2.1 An MNE Group means any Group that includes at least one Entity or Permanent Establishment that is not located in the Jurisdiction in which the Ultimate Parent Entity of the MNE Group is located.

1.2.2 A Group means a collection of Entities that are related through ownership or control such that the assets, liabilities, income, expenses and cash flows of those Entities:

(a) are included in the Consolidated Financial Statements of the Ultimate Parent Entity; or

(b) are excluded from the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds, or on the grounds that the Entity is held for sale.

1.2.3 A Group also means an Entity that is located in one Jurisdiction and has one or more Permanent Establishments located in other Jurisdictions provided that the Entity is not a part of another Group described in Article 1.2.2.

Article 1.3. Constituent Entity

1.3.1 A Constituent Entity is any of the following:

(a) any Entity that is included in a Group; or

(b) any Permanent Establishment of a Main Entity that is within paragraph (a).

1.3.2 A Permanent Establishment that is a Constituent Entity under paragraph (b) above shall be treated as separate from the Main Entity and any other Permanent Establishment of that Main Entity.

1.3.3 A Constituent Entity does not include an Entity that is an Excluded Entity.

Article 1 - Scope of Application

Article 1.1. Scope of this Decision

Article 1.2. MNE Group and Group

Article 1.3. Constituent Entity

Article 1.4. Ultimate Parent Entity