Pillar Two
As part of OECD’s flagship BEPS 2.0 program, the primary objective of Pillar Two provisions is to ensure that any in-scope Multinational Enterprise (MNE) Group has a minimum Effective Tax Rate (ETR) of 15% across all its Group entities, in accordance with the Global Anti-Base Erosion (GloBE) Model Rules.
Essentially, these rules provide that if an affected MNE Group has an ETR of less than 15% in any of its operational tax jurisdiction(s), then either the ultimate parent entity or other constituent entities need to collect and pay the tax difference of up to 15%.
With the Pillar Two provisions making significant progress and advancements across all major regions and countries, it becomes extremely important for an in-scope MNE Group to ensure that it fully and appropriately complies with the prescribed local laws in each of its tax jurisdiction, where Pillar Two rules have either been implemented or have been proposed.
This involves key and significant processes, systems, and policies to be put in place to ensure adequate and timely compliance with the local regulations as well as global guidelines and to avoid any potential tax disputes.
At PKF, our global community of seasoned professionals has a deep knowledge of tax, accounting and all the related advisory aspects of Pillar Two provisions in conducting initial impact assessments, fully supporting in terms of operational readiness and advising on the relevant compliance obligations related to Pillar Two provisions.
In this regard, please do have a look at our detailed Pillar 2 services brochure that captures our key service offerings in greater detail. We would be happy to discuss the same with you in further detail and can also discuss the potential assistances which we can offer to you.