The OECD's September 2026 Pillar Two Package Changes How You File Your GIR — Starting Now

The OECD's September 2026 Pillar Two package updates the GIR template, tightens the explicitly conditional taxes rule, and launches legislative peer reviews. For fiscal years beginning December 31, 2025, this is your new reality.

Editorial source review — November 1, 2026. This machine-generated article has been reviewed, but is not certified accurate. Source-backed corrections are incorporated where established. Other legal, survey and product claims may remain unverified; check applicable primary authorities before relying on a deadline or tax position.

Findings in the original version: OECD confirms the September package and fiscal-year applicability of GIR revisions. “Explicitly conditional” tax treatment needs the exact guidance conditions; it is not every incentive or conditional payment.

On September 11, 2026, the OECD/G20 Inclusive Framework released its most consequential Pillar Two update since the January 2026 side-by-side package. Most corporate tax departments are still processing it. If your fiscal year begins on or after December 31, 2025 — and that means most calendar-year companies filing for 2026 — you are now filing under a new GIR template, new guidance on explicitly conditional taxes, and a formal legislative peer review framework. This is not a planning story. It is an operational one.

EY published a detailed analysis of the package on September 25, 2026. BDO followed with its own technical breakdown. The consensus across the Big Four is the same: the September 2026 package signals the OECD moving from rule development into enforcement mode. That transition has direct consequences for how your provision is built, how your GIR is filed, and how your jurisdictional coverage analysis holds up under scrutiny.

What the September 2026 Package Actually Contains

The package has three distinct components, each with its own operational implication:

The updated GloBE Information Return. The September 2026 GIR incorporates the January 2026 side-by-side package — the accommodation the OECD introduced in response to the US political position on minimum taxes. It is effective for fiscal years beginning on or after December 31, 2025. This is your form for the 2026 fiscal year. Beyond the side-by-side updates, the GIR includes clarifying notes that the OECD states apply to all future filings. Some interpretive questions your team has been resolving locally are now answered in the document itself, and those answers are binding.

Administrative guidance on explicitly conditional taxes. An explicitly conditional tax is one that only applies when a constituent entity is already subject to a Qualified IIR or UTPR in another jurisdiction. The September 2026 guidance confirms these taxes do not count as Covered Taxes for GloBE purposes. Several jurisdictions had structured their domestic minimum taxes as conditional on foreign exposure — essentially waiting to see if another jurisdiction would levy a top-up tax before activating their own. The OECD has now formally disqualified this structure.

The legislative peer review framework. The OECD will formally assess whether jurisdictions have implemented the GloBE Model Rules correctly. Qualified IIR and UTPR status — which determines whether your domestic taxes count and whether you face top-up taxes in other jurisdictions — now depends on a certification process with defined criteria and timelines. Jurisdictions that fail the review lose their qualified status. That changes the math for constituent entities operating in those jurisdictions.

The Updated GIR: Three Things Your Filing Team Must Know

1. The effective date is not theoretical

The new GIR applies to fiscal years beginning on or after December 31, 2025. For calendar-year companies, the 2026 fiscal year is already underway and this is your template. There is no transition period on the form itself. The OECD's clarifying notes also apply to future filings broadly — meaning even companies with off-calendar fiscal years will be expected to follow the interpretive guidance embedded in the new GIR going forward.

2. The US Treasury endorsed it publicly

When the September 2026 package was released, US Treasury issued a press statement welcoming the updated GIR. This is not routine. It signals that the US government — which has not enacted domestic Pillar Two legislation — considers the GIR framework compatible with its current position. US-headquartered MNEs are in the filing ecosystem even without domestic minimum tax legislation. That is a more settled position than it was six months ago.

3. The GIR is a liability assessment document

Tax authorities in jurisdictions that have enacted Pillar Two will use the GIR data to assess constituent entity top-up tax exposure before they schedule an audit. Every line of the return is structured to enable risk scoring. Filing accuracy is a direct audit risk factor. The companies that file a clean GIR backed by well-documented data will face fewer questions. The companies that file a GIR with inconsistencies — because their provision data is not structured to produce GIR-formatted outputs — will face more.

Explicitly Conditional Taxes: The Guidance That Closes a Loophole

Let me be direct about what this guidance does. Several jurisdictions enacted domestic minimum taxes that were structured to activate only when a company's income was already being taxed under a foreign Pillar Two mechanism. The argument was that this prevented double taxation. The result, in practice, was that these taxes sometimes did not count as Covered Taxes under GloBE rules — which created a gap between what the jurisdiction collected and what counted toward the 15% effective rate threshold.

The September 2026 administrative guidance closes that gap. If a tax only applies to a constituent entity that is a GloBE taxpayer — meaning its activation is explicitly conditioned on foreign IIR or UTPR exposure — it is an explicitly conditional tax and it does not qualify as a Covered Tax. The guidance applies to both inclusionary and exclusionary drafting approaches, which covers the various structural forms these taxes have taken.

For your Pillar Two modeling team, the action is clear: identify every constituent entity in every jurisdiction with a domestic minimum tax. For each, determine whether that tax is explicitly conditional under the September 2026 definition. If it is, remove it from your Covered Taxes calculation and recalculate the effective rate. In some jurisdictions, this will create exposure where your current model showed coverage. Find those jurisdictions now, before year-end.

The Legislative Peer Review Framework: Why Qualified Status Matters More Than You Think

The peer review framework is the part of this package that gets the least attention and deserves the most. Qualified IIR and UTPR status is not permanent. It depends on a jurisdiction's domestic legislation correctly implementing the GloBE Model Rules. The September 2026 framework establishes a formal OECD process — with defined criteria, timelines, and consequences — for assessing whether that implementation is correct.

When a jurisdiction loses qualified status, the calculation of top-up taxes for constituent entities operating there changes. If you have a significant operation in a jurisdiction whose qualified status is under review, and that review results in a downgrade, your Pillar Two liability calculation shifts. You need to know about this before your provision is finalized, not after.

At Clarity Tax, we treat Pillar Two compliance as a data infrastructure problem — not a one-time modeling exercise. The rules evolve. Jurisdictional qualified status changes. Safe harbor conditions change. The only way to maintain an accurate, current Pillar Two position is a provision engine that runs on structured, version-controlled tax knowledge — one that can ingest guidance updates and recalculate positions automatically. A spreadsheet model, updated annually, will not keep pace with the cadence of OECD guidance releases we are now seeing.

What to Do Monday Morning

1. Pull the September 2026 GIR and compare it to your current template. The OECD published the updated GIR on its website when the September 2026 package was released. Have a senior team member map the differences against your current filing framework this week. Do not wait until Q4 to discover that your data structures do not produce what the new template requires. 2. Audit your Covered Taxes for explicitly conditional taxes. For every jurisdiction in your GloBE model, determine whether the domestic minimum tax qualifies under the explicitly conditional tax definition in the September 2026 guidance. Recalculate effective rates where necessary. Flag any jurisdiction where removing a previously included tax creates a sub-15% effective rate. 3. Add peer review status to your jurisdictional monitoring process. The OECD and several commercial publishers maintain current trackers for Pillar Two implementation status by jurisdiction. Add peer review status as a monitored data point. You need to know when a high-exposure jurisdiction's qualified status is under review before your provision closes, not after. 4. Map your 2026 GIR filing to the new template now. Nine months remain in most calendar-year fiscal periods. Use that time to close the gap between what your current data infrastructure produces and what the September 2026 GIR requires. If your provision system does not produce GIR-formatted outputs, that is a remediation project that starts now. 5. Review your QDMTT safe harbor analysis with counsel. The September 2026 guidance includes clarifications on how QDMTT safe harbors interact with explicitly conditional taxes. If you are relying on a QDMTT safe harbor in any jurisdiction, your external counsel needs to review whether the clarifications change your position before year-end.

Sources

Pillar Two compliance runs on structured data — not spreadsheets. See how DisclosureIQ's knowledge graph keeps your GloBE positions current as the rules evolve.

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