The OECD’s Pillar Two model rules aim to help ensure that multinational enterprises with revenue of more than €750 million are subject to a minimum 15% tax rate on income arising in each of the jurisdictions in which they operate.
Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, described the rules – published in December and initially intended to take effect next year – as evidence of the commitment of the 137 countries that agreed to them to standardize global taxation.
However, the calculations required to comply with the global minimum tax are complex and will require substantial resources. Data from enterprise resource planning (ERP) and treasury systems beyond what is normally necessary for tax reporting and compliance will be required, and the calculation is expected to demand considerable additional treasury resource.
Forty percent of businesses recently surveyed by EY said they had considered adding headcount and investing in new technology to meet the requirements. Payroll is just one of the dozens – if not hundreds – of data points that will have to be tracked to ensure compliance.
Corporate
