Pillar Two
Pillar Two introduces a coordinated framework to establish a global minimum taxation rate / effective tax rates (ETR) of 15%, applicable to multinational entity (MNE) groups with consolidated global revenue over EUR 750 million.
Introduction
The tax implications of Pillar Two are significant for multinational enterprises, regardless of their primary tax jurisdiction’s status of implementation. Companies will need to ensure they have data and resources available to forecast and model, as well as maintain reporting and compliance requirements.
The Moore Global network of international tax and transfer pricing specialists are uniquely placed to advise on implementation and compliance with Pillar Two, as well as other compliance obligations impacting large multinationals.
Multinational entities (MNE) need to ensure they have the data required to forecast and model their tax obligations now and into the future, as well as the data to maintain reporting and compliance requirements. In addition to tax, there are several key stakeholder groups within an organization who are likely to be most impacted by the changes as a result of Pillar Two. One of the common challenges many companies are facing is a resource deficit to lead such an initiative.
MNE’s who meet the criteria for Pillar Two need to understand, evaluate, and model the impacts of Pillar Two across the organisation. This includes, but is not limited to, assessing the additional data and reporting/compliance requirements, evaluating the existing technology systems and capabilities, establishing processes and controls, preparing and training resources, and managing stakeholder expectations.
Insights
When does Pillar Two come into effect?
Implementation of Pillar Two rules varies by jurisdiction and vary in how these rules apply alongside existing tax law on a country-by-country basis. However, there is broad consensus in the underlying principles, based on the OECD model, with more countries introducing legislation for future income years.
The Pillar Two stages
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Stage 1
Monitoring rules and announcements as more jurisdictions sign on to Pillar Two.
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Stage 2
Internal review, assessment of data requirements, and identifying gaps in knowledge.
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Stage 3
Internal assessment of whether transitional rules will be applicable to you.
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Stage 4
Internal impact assessment to determine potential exposure to top-up and compliance obligations.
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Stage 5
Detailed assessment by external advisors and understanding outsource compliance options available.
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Stage 6
Implementing data analysis tools and operating compliance model; providing a client specific solution.
Wherever you are on your Pillar Two journey, the Moore team can help you with everything from implementation through to advisory including calculation and data collection, compliance, review and advise on your obligations.
The requirements upon an organisation will vary greatly depending on the jurisdictions you operate in, the sophistication of existing tax governance policies and compliance processes.
How does Moore help businesses with Pillar Two?
At Moore, we tailor to your specific requirements. We have a global network of specialist advisors, well connected and available to assist with all your Pillar Two requirements from end-to-end compliance and advisory, to a targeted and bespoke solution to suit your needs.
Moore has partnered with global software company Wolters Kluwer and have a global license to their BEPS Pillar Two module, which is part of their CCH Integrator global corporate tax platform. CCH Integrator provides templated schedules and calculations, allowing us to follow the Organisation for Economic Co-operation and Development (OECD) rules and allows for compliance with the local tax jurisdiction filing requirements.
Watch our Video Series to help you in your Pillar Two Journey
Part One – Eoghan Bracken from Moore Ireland
15 min
Part Two – Alex Jenkins from Moore Kingston Smith
18 min
Part Three – Gary Calford from Moore Australia
21 minDownloads
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