What is Pillar 2 about?

• Pillar 2 introduces a global minimum taxation via a new globally aligned system based on which multinational groups with consolidated revenue of at least €750m are subject to a minimum Effective Tax Rate (ETR) of 15% in each jurisdiction where they operate.
• In Germany, the Pillar 2 rules became effective in 2024. There are also other jurisdictions working on their domestic rules to implement Pillar 2 as from 2024 and 2025.

How does Pillar 2 affect my business?

• Pillar 2 is based on comprehensive data requirements gathered from a variety of data sources and a diverse group of stakeholders which makes the collection of Pillar 2 data challenging and time consuming.
• To be compliant among a complex and rapidly changing regulatory framework, groups within the scope of Pillar 2 need to efficiently orchestrate internal resources based on flexible processes affecting the global organization.

What processes are affected in order to be compliant?

Pillar 2 impacts both the Tax Compliance but also the Tax Reporting process:

Tax Compliance Process:

1. Filing of a global GloBE-Information Return
2. Filing of local Pillar 2 Tax Returns in Germany and other jurisdictions

Tax Reporting Process:

1. Accrual for potential Pillar 2 Top-up Tax in Quarterly/ Annual Financial Statements
2. Notes to the (Group) Financial Statements