To cost-effectively build Pillar Two into planning, reporting and compliance, large MNCs need Programme Management that’s comprehensive enough to manage the breadth and complexity, but agile enough to adapt to the many potential variables.
The OECD’s Base Erosion and Profit Shifting (BEPS) Pillar Two initiative is now live, introducing a complex global minimum tax framework. This new regime presents significant reporting and compliance challenges for multinational enterprises (MNEs) with annual revenue of €750 million or more. While Pillar Two is already live, its scope and requirements will continue to evolve over the next few years, making now a crucial time for businesses to implement a Pillar Two Programme.
Precisely what’s needed for MNEs to be Pillar Two ready will continue to evolve as Transitional Safe Harbours phase out and countries implement Pillar Two into their own laws, each with different timelines and details.
Therefore, to efficiently integrate Pillar Two into Tax Reporting & Compliance, MNEs will need a programme that is comprehensive enough to handle the breadth and complexities of the regime but also agile enough to adapt as requirements evolve.
At Complete Projects, we specialise in building such programmes, ensuring a streamlined, cost-effective and risk-mitigation based approach.
This list is a simple view of the top complexities and variables that MNCs will need to manage to cost-effectively build Pillar Two into planning, reporting and compliance.
1. Complex & Evolving Global
Model Rules
2. Transitional Safe Harbours
3. Country Enactment Variables
4. QDMTTs
5. Changes to Related Tax Laws
6. Joint Ventures
7. Undertaxed Profits Rule (UTPR)
8. Changing Legal Entity Footprint
9. Evolving Technology
10. Many Stakeholders for Diverse Data Inputs
For more detail on each of the headlines, see our article here:
BEPS Pillar Two: Top 10 Complexities & Variables
We tailor all Programmes to specific client requirements. But this visual illustrates the workstreams most Pillar Two Programmes need:
For Scope, we stay up to date on the latest rules guidance and country enactments. And we get across the detail of your legal entity footprint to understand where and when you'll need Transitional Safe Harbour, GIR & QDMTT compliance.
We then engage the required stakeholders to Enable a cost-effective build-out of reporting and compliance solutions whilst making use of transitional safe harbours through to FY27.
This sets the programme up for the Delivery of financial reporting that meets auditor requirements; and on-time registrations + filings for Transitional Safe Harbour, GIR, QDMTT and UTPR compliance.
*For MNCs with a 31 December 2024 financial year-end and a UPE in a country that enacted in 2024.
Workstreams and timelines will vary dependent on each MNC’s legal entity footprint as well as other organisation, accounting and data systems specifics.
As Pillar Two reporting and compliance becomes a reality for MNCs, the need for effective software solutions is becoming increasingly clear. In fact, a live survey of more than 100 companies at the International Tax Review’s inaugural Pillar Two Forum in September 2024 revealed that 79% of MNCs already have or intend to source and implement specialised Pillar Two software.
At Complete Projects, we have significant experience guiding clients through every step from selecting the software via RFI/P and Proof of Concept through to ensuring a smooth and successful implementation.
Pillar Two will particularly require ongoing processes, controls and automations to source and standardise the large volumes of data that will be incrementally needed from disparate sources over the next few years. At Complete Projects, we ensure that your solution is not only implemented effectively but also scalable and sustainable for the future.
At Complete Projects we’ve been delivering international tax, finance, legal and CoSec programmes since 2008. We've delivered for organisations of all sizes and sectors, spanning energy, technology, government, manufacturing, telecoms and pharma. Our extensive expertise allows us to create flexible, cost-effective solutions tailored to clients' needs.
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