– The first step to implement a Pillar 2 solution in your group
The OECD released the transitional Safe harbour rules in December and has its starting point in the CbC reporting to calculate if a jurisdiction qualifies. However, the rules are complex, and thus, you need to put a process in place to understand how these rules affect your group. Therefore, understanding the magnitude and complexity of data collection for GloBE calculation purposes is crucial.
There are a few things that are important to think about regarding the safe harbour calculation.
- You need a system to control all entities, not only those included in the CbC reporting
- You need to identify to what extent you can use your CbC figures.
- You need to control the quality of your existing CbC data, Total revenue and Profit (Loss) before income tax.
- You need to characterize each entity for Globe purposes, e.g. Constituent entities, joint ventures and minority shareholdings.
- You need to ensure that you can collect financial data such as total revenue, Profit (loss) before income tax, income tax expense (adjusted for GloBE), payroll, tangible assets and net fair value loss.
- You must do the safe harbour calculations on a jurisdictional level and separately for each joint venture company.
How can you start a structured process to understand the effects of the safe harbour rules and be Pillar 2 ready
Blika is developing a solution to help you put a process in place to calculate which jurisdictions qualify under the safe harbour rules. You can quickly be up and running with our solution that facilitates the complexity of making the Pillar 2 safe harbour calculations. The Blika Pillar 2 solution is an end-to-end solution where you can automatically make the GloBE calculation and control the whole Pillar 2 process. Blika is currently developing all parts of the Pillar 2 process and will add support, e.g., for rollover figures and filing. However, you can already use the solution to assess the effects of the safe harbour calculations and ensure that you are implementing a structured process. With Blika, you have a solution that can support you through the whole Pillar 2 implementation journey step by step. Due to the complexity of the Pillar 2 rules, you may want to start an implementation journey as early as possible.
Start implementing our solution today and ensure you are on track to be Pillar 2 compliant.