Pillar Two and Tax Systems

If you’re reading this article, you’re already thinking about Pillar Two.

We’re here to help you not only stay informed but also get ahead, ensuring that your organisation is fully prepared for the upcoming changes required to be compliant.

What is Pillar Two?

As a short recap, Pillar Two will establish a global minimum tax regime which will apply to multinational groups with consolidated revenue over 750m Euros.

Although the deadline for UK organisations to file their information return and calculations with HMRC isn’t until the 30th June 2026, businesses will already be undertaking detailed provision calculations for inclusion in their glossies for FY24 onwards. Irish businesses are also following the same timeline.

What challenges might Pillar Two bring?

Pillar Two will require you to source a lot more information from across your entire global group – if this is dealt with using email and spreadsheets it’s going to be nothing short of painful.

Add to this the probability of local teams that don’t know what’s being asked of them (bear in mind the “local team” might be a general finance person rather than a tax specialist, or even local advisor) – and this is going to be even harder.

How we can help

Simply put, we’ve got this, so you don’t have to worry.

As you’d expect from the market leading provider of corporation tax compliance software in the UK and Ireland, we’ll ensure that our software complies with all the core calculations as per OECD model rules and references. Our tax pedigree is second to none.

But we aren’t just looking at Pillar Two from a compliance perspective – that’s table stakes.

To enable you to manage this fundamental change in your processes, with minimal impact on your teams we’re harnessing cloud technology to offer significant benefits. Our Pillar Two solution integrates with country-by-country reporting and tax provisioning on a single platform for international tax, enabling you to establish a single source of truth for your tax compliance data and strengthen your tax control framework.

It will also allow you to collaborate effortlessly with advisors and colleagues regardless of location – through a single interface, using the same data, significantly simplifying the arduous task of sourcing and leveraging data that Pillar Two introduces.

Should I be doing anything now?

As mentioned earlier, UK and Irish organisations will have until the 30th June 2026 to file under Pillar Two requirements. However, when talking with our customers, there are some who are choosing to do two things in preparation;

Working (typically with advisers) to understand data gaps and looking at their current systems to see how much of a gap they have, and thinking about how they might plug them. You will likely have Excel working papers which are used to power your disclosure in your annual reports. It’s now time to take that work that’s been done and operationalise that.

So, if you want to get ahead, you too may wish to do something similar.

 
Originally published on 01/03/2023, updated on 02/09/2024.