Corporate Investments and Pillar Two

The Pillar Two GloBE treatment of holding structures, particularly fund investments,  will depend to a large extent on the nature of the activities, the accounting treatment and the ownership interest.

When looking at fund investments, pension funds, sovereign wealth funds and investment funds, in many cases they should generally qualify as excluded entities and would therefore be carved-out from the scope of Pillar 2 (aside from when determining the 750 million euro revenue threshold). This also applies to qualifying subsidiaries of such entities.

Insurance companies do not get a specific carve out under the excluded entity rules, and therefore the GloBE rules will apply to them, subject to certain specific provisions for insurance investment entities.

The first consideration will be the accounting treatment of the investee in the investor’s financial account, and in particular whether the results are consolidated or not.