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Pillar 2 Timeline

13 December, 2022

Insights

Setting your group’s timeline for getting Pillar 2 ready is essential. Below we have gathered some thoughts regarding this based on our Pillar 2 discussions with multinational companies.

One of the most common questions is, “When do we as a group need to be Pillar 2 ready?”.

One obvious answer is that you must file 18 months after the first income year when the rules are applied (probably June 2026). However, for most multinational companies, this is not entirely correct.

Instead, you need to ask yourself the following questions.

  • When does our group need a reasonably correct calculation of the Pillar 2 tax effect on the group? Do you need to calculate corresponding numbers for accounting purposes on the 2023 figures? Do you need to calculate a potential top-up tax on budgeted figures for 2024 due to accounting or budget purposes? Do you want to calculate a top-up tax on budget/forecast figures and book that number each quarter and make a true-up at year-end, or would you like to calculate the top-up tax each quarter? Do you know if the top-up tax is significant or not?
  • How will the group manage the current tax accounting regarding Pillar 2 and Qualified domestic top-up tax during 2024? Monthly, quarterly, or half-year calculations?
  • How complex is our environment from a tax point of view, and how massive is our data collection challenge? The higher your exposure to a more significant top-up tax and the more complex your data collection challenges are, the earlier you need to start your Pillar 2 compliance journey.

Most of the multinational groups we discuss this with aim to have a Pillar 2 process during Q 4 2023, for at least a semi-automated data collection process with calculation and analysis possibilities. And then work continuously to make that process more efficient and completed during 2024-25. Lastly, there will be a focus on the Pillar 2 compliance reporting process in the later part of 2025.

If you think your group needs to have the first version of your Pillar 2 process in place in Q 4 2023, you must start your work now!

We have discussed the pillar 2 challenges with many multinational groups in several countries and have developed a solution that could manage your Pillar 2 process. Thus, if you want to understand the challenges that you face and how a Pillar 2 solution could support you in your process, don’t hesitate to get in touch with us.

Do you want to discuss you Pillar 2 needs? Please contact us.