The new year 2026 has brought a significant number of changes in the area of the top-up tax (the socalled Pillar 2 / GloBE). Although the changes have so far been developed and adopted at the OECD level and the process of their implementation into Polish law is expected to begin shortly.

What do these changes relate to? In short, they address the status of U.S. multinational groups in the context of Pillar 2, expand the scope of safe harbours available to taxpayers (which should make the assessment of Pillar 2 obligations more straightforward), and tackle the issue of tax incentives. The changes were adopted on 5 January and are collectively referred to as the “Side‑by‑Side Package.”

 

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Below is a brief overview of the key changes:

Side‑by‑side system

Jurisdictions that operate their own top up tax system deemed to be equivalent to Pillar 2 and in which Ultimate Parent Entities (UPEs) are located may opt out of the Pillar 2 regime. A dedicated list of such jurisdictions will be maintained. At present, the only country included on this list is the United States — in practice, the regulation has been designed primarily to exclude U.S. multinational groups from the Pillar 2 regime.
The system provides for two types of safe harbours: the SbS Safe Harbour and the UPE Safe Harbour.

  • SbS Safe Harbour - under this mechanism, if the Ultimate Parent Entity (UPE) of a group is located in a jurisdiction that operates its own top-up tax system equivalent to Pillar 2 (a so‑called Qualified SbS Regime), the group may elect to fall under this local minimum tax system. As a result, the Top‑up Tax under the IIR (Income Inclusion Rule) and UTPR (Undertaxed Profits Rule) is deemed to be zero for all entities within the group. Importantly, however, the SbS Safe Harbour does not affect the application of Qualified Domestic Minimum Top‑up Taxes (QDMTTs), which remain fully applicable and may be imposed by local tax authorities on entities resident in other jurisdictions. The SbS Safe Harbour does not apply to groups whose UPE is located in a jurisdiction without a Qualified SbS Regime.
  • UPE Safe Harbour - the UPE Safe Harbour provides relief solely with respect to the UPE jurisdiction. If the UPE of a group is located in a jurisdiction with a Qualified UPE Regime (currently, no jurisdiction has been included on this list), the group may elect this Safe Harbour, in which case the top-up tax under the UTPR for entities located in the UPE jurisdiction is deemed to be zero. This mechanism does not affect the application of the IIR or UTPR in relation to entities located outside the UPE jurisdiction and has no impact on the operation of QDMTTs.

Safe harbours

With respect to safe harbours, the following solutions have been proposed by OECD:

  • Introduction of the Simplified ETR Safe Harbour - this is a permanent safe harbour under which the effective tax rate (both qualified income and qualified tax) is calculated using simplified data derived from the group’s financial statements, subject to only a limited number of adjustments (as opposed to the numerous adjustments required under the standard Pillar 2 rules). If the ETR calculated in this simplified manner exceeds 15%, the top‑up tax is deemed to be zero, and the group is not required to perform the complex qualified income and qualified tax calculations otherwise mandated by Pillar 2.
  • Extension of the Transitional CbCR Safe Harbour - under the existing rules, the transitional CbCR safe harbour was only available up to fiscal year 2026. The Side‑by‑Side Package extends its availability to fiscal year 2027. This extension is intended to facilitate a smooth transition to the Simplified ETR Safe Harbour. During the period in which both safe harbours apply, groups will be able to choose whether to rely on the transitional CbCR safe harbour or the Simplified ETR Safe Harbour.
  • Introduction of the Substance‑Based Tax Incentives (SBTI) Safe Harbour - this new safe harbour allows, for ETR calculation purposes, an increase in the amount of covered taxes (and thus the ETR) by the lower of: (i) Qualified Tax Incentives (QTI), or (ii) the so‑called Substance Cap. Until now, tax incentives, reliefs and credits generally worsened the position of capital groups under Pillar 2, as they reduced taxes and could therefore lower the ETR below the 15% threshold. This is now set to change through the introduction of QTIs. QTIs are local tax incentives calculated as a direct function of the taxpayer’s real economic presence in a given jurisdiction, i.e. based on incurred investment expenditure (a good example being the Polish R&D relief) or on the volume of production (e.g. energy generation). QTIs do not include grants or subsidies awarded at the discretion of tax authorities. At the same time, the OECD sought to prevent situations in which substantial tax incentives would not be aligned with the taxpayer’s actual economic substance in a given jurisdiction. Therefore, a limiting mechanism — the Substance Cap — has also been introduced, calculated as a specified percentage of payroll costs or the value of tangible assets located in the jurisdiction.

As can be seen, the introduced solutions go far beyond merely cosmetic changes and result in material and tangible modifications to the Pillar 2 taxation framework. They will be of particular interest to Polish entities that form part of U.S. capital groups and entities benefiting from tax preferences in Poland (tax reliefs, tax exemptions, and corporate income tax preferences), but they also include proposals that may prove relevant to all taxpayers within the scope of Pillar 2, especially due to the envisaged calculation simplifications. The next step now lies with the Polish legislator.