De Minimis Test
Educational guide to the Transitional CbCR Safe Harbour De Minimis Test — definition, AND logic for revenue and profit thresholds, inputs, and a fictional worked example.
Definition
The De Minimis Test is one of three pathways under the Transitional Country-by-Country Reporting (CbCR) Safe Harbour in OECD Inclusive Framework Safe Harbours guidance. It asks whether a jurisdiction’s relevant revenue and profit measures are small enough that, under the transitional framework, the jurisdiction can be treated as meeting Safe Harbour conditions without relying on the Simplified ETR or Routine Profits pathways.
In the orientation used across Mirentra’s calculator rules pack (aligned to Inclusive Framework threshold concepts), the absolute thresholds are €10 million of qualified CbCR revenue and €1 million of qualified CbCR profit (or loss). Confirm currency, averaging or lookback rules, and domestic adoption in the guidance and local law that apply to your group.
Purpose
The purpose is administrative relief: jurisdictions with de minimis scale under the transitional tests may avoid a full GloBE computation path for the transitional period when the test is available and correctly applied. It focuses detailed GloBE work on larger or higher-risk jurisdictions while still requiring disciplined CbCR-aligned inputs and documentation.
Inputs
Typical inputs are (1) qualified CbCR revenue for the jurisdiction and (2) qualified CbCR profit or loss for the jurisdiction, prepared consistently with the transitional framework’s definitions — not necessarily every line labeled “revenue” or “profit” in a local statutory pack. Permanent establishments, entity classification, and CbCR mapping errors are common sources of challenge.
Formula (AND logic)
Orientation formula: Revenue test passes if qualified CbCR revenue is strictly below the revenue threshold; profit test passes if qualified CbCR profit (or loss) is strictly below the profit threshold. The De Minimis Test passes only if both legs pass (AND logic). A pass on revenue alone or profit alone is not enough.
In symbols used by Mirentra’s rules pack: PASS only if (qualified CbCR revenue < €10,000,000) AND (qualified CbCR profit or loss < €1,000,000). Loss-making jurisdictions may satisfy the profit leg under transitional orientation when profit is below the threshold (including negative amounts) — still confirm the precise guidance wording you rely on.
Fictional worked example
Fictional Jurisdiction A (same currency as CbCR; illustrative EUR amounts): qualified CbCR revenue = €8,500,000; qualified CbCR profit = €750,000. Revenue test: 8,500,000 < 10,000,000 → PASS. Profit test: 750,000 < 1,000,000 → PASS. Combined (AND) → De Minimis PASS.
Fictional Jurisdiction B: revenue = €12,000,000; profit = €400,000. Revenue test FAIL; profit test PASS. Combined (AND) → De Minimis FAIL, even though profit alone is under €1 million. The group would then evaluate Simplified ETR and Routine Profits (or escalate to full GloBE analysis) under the rules that apply.
Review notes
Reviewers typically check: CbCR-to-GloBE entity mapping; whether revenue and profit use qualified definitions; currency consistency; whether any averaging or multi-year concepts required by guidance were applied; and that AND logic was not silently replaced with OR logic in workpapers. Incomplete inputs should remain incomplete — never coerce blanks to zero to force a pass.
Product link
Try Mirentra’s illustrative Safe Harbour Calculator at /tools/pillar-two-safe-harbour-calculator to walk De Minimis arithmetic from user-supplied inputs. Outputs are informational decision-support only — not a filing determination. For broader product orientation see /safe-harbour and /platform.
Primary sources and source-review date
Primary official sources: Safe Harbours and Penalty Relief (December 2022 PDF); Administrative Guidance (December 2023 PDF); Consolidated Commentary to the GloBE Model Rules (2026, DOI 10.1787/4377e89f-en); GloBE Model Rules PDF. Source-review date for links used in this orientation: 2026-09-07.