Is Your Group in Scope? A Practical Starting Checklist

Find the ultimate parent entity and obtain the consolidated financial statements relevant to that group. Do not begin with a single subsidiary’s turnover or combine unrelated businesses simply because they share an investor. Identify the accounting consolidation perimeter and ask whether entities omitted on size or materiality grounds need further examination under the GloBE definitions.

Check whether the structure includes operations in more than one jurisdiction, including relevant permanent establishments. Record any uncertainty about ownership, control, joint ventures, investment entities or excluded entities. Their treatment requires analysis; a company name containing “fund” or a registration in a low-tax jurisdiction does not establish the answer. Keep the group chart with the scope working paper.

The standard GloBE revenue test looks for at least EUR 750 million of consolidated revenue in at least two of the four fiscal years immediately preceding the tested year. A single strong year is not the full test. Identify the appropriate accounting figures and investigate currency conversion, short periods, mergers and demergers before applying that test mechanically.

Consider a fictional calendar-year group testing 2026. Its relevant revenue history is 2022 through 2025. Assume comparable euro figures of EUR 710 million, EUR 770 million, EUR 740 million and EUR 800 million, with no special adjustments. It meets the ordinary revenue threshold because two relevant years reach EUR 750 million. That illustrates the threshold only; it does not establish every condition for a particular local charge.

Prepare a one-page conclusion showing the tested year, parent entity, accounts used, four revenue figures and the reasons for any adjustments. Separate the general GloBE scope analysis from each jurisdiction’s domestic application. Confirm relevant commencement periods, local definitions and any domestic regime with a different reach. The OECD framework is not itself a substitute for checking enacted law.

If the answer is uncertain, identify exactly what would change it. Perhaps an acquisition requires a special revenue calculation, or a subsidiary has relied on an exemption from preparing consolidated accounts. Assign that question to an adviser and retain the response. “Probably outside scope” without a documented basis is difficult for a new finance director or reviewer to assess later.

Keep scope assessment in the annual reporting process and revisit it when a material transaction changes the group. A prior conclusion should not be copied forward without checking the relevant history and structure. If you are close to the threshold or unsure which parent’s accounts to use, bring us the ownership chart and four-year accounts. We can help identify the scope questions that need resolution before you spend time on detailed tax calculations.