Substance-Based Income Exclusion (SBIE)

Definition

SBIE excludes 5 percent of payroll and 5 percent of tangible-asset carrying value from the GloBE income base (with transitional higher percentages during the 10-year phase-in). The exclusion is designed to give weight to real economic activity.

Examples

• A manufacturer with significant tangible assets and payroll benefits from a larger SBIE carve-out.