Article 10 of the OECD Model Rules defines an entity as either:
– a legal person (except an individual); or
– any arrangement that prepares separate financial accounts.
Note that the First Set of OECD Administrative Guidance also excludes government agencies (both central and local government) that carry out government functions.
The first limb above would generally catch foundations, whilst the second would catch trusts.
This means that trusts and foundations are squarely within the Pillar Two rules and could be a low-taxed entity, an intermediate entity/partially owned parent entity or even an ultimate parent entity (UPE).
Under Article 1.4.1 of the OECD Model Rules, a UPE for the Pillar Two rules is:
Whether a trust is a UPE is an important consideration as (1) in many cases the UPE is required to apply the income inclusion rule to account for top-up tax and (2) the definition of an MNE group hinges on the relationship between the group companies and the UPE.
For instance, take this scenario:
Determining if the trust was the UPE could result in all companies then potentially being within the scope of the Pillar Two rules (subject to any specific exclusions etc). Aside from the application of Pillar Two to the group, the trust could then be liable to account for top-up tax.
This in itself could create issues.
The definition of a group in the Pillar Two rules relies on accounting principles so that there is a group if there is a requirement to prepare consolidated financial statements.
Whilst a trust or foundation may not usually have to prepare consolidated financial statements under an accounting standard, the Pillar Two rules go further.
Article 10 of the OECD Model Rules states that if no consolidated financial statements are prepared a deeming provision applies so that the entity must prepare hypothetical consolidated financial statements as if it was required to prepare them in accordance with an Authorised Financial Accounting Standard that is either an Acceptable Financial Accounting Standard or another financial accounting standard.
As such, a trust or foundation would need to determine if it would be required to prepare accounting standards under an accounting standard.
This would again depend on accounting principles.
Under IFRS for instance, there is a requirement to consolidate if the trust or foundation possesses power over the parent entities, has exposure to variable returns from its involvement with them and has the ability to use its power over them to affect its returns.
On November 26, 2025, Montenegro issued a Draft Law to apply a domestic minimum top-up tax (DMTT) from January 1, 2026.
On December 1, 2025, Turkey announced an extension in the filing and payment date for the QDMTT return and the opening of a test environment for the submission of the QDMTT return.
On November 26, 2025, the Swiss Federal Council issued an amendment to the Minimum Tax Ordinance to provide for the OECD GIR provisions, as well as some other small amendments.
On November 19, 2025, Hungary enacted Pillar 2 amendments from the 2025 Autumn Tax Package. This includes some amendments to the operation of the Transitional CbCR Safe Harbour.
On November 18, 2025, Slovakia issued its QDMTT Return
On November 14, 2025, Hungary issued a Draft Regulation (for consultation) to provide for the detailed application of the Pillar 2 Safe Harbours.
Italy has issued 2 regulations relating to the Administration of the Pillar 2 top-up tax. A November 7, 2025 Decree provides for more information on the rules for the submission of the GloBE tax return. Resolution no. 63 of November 10, 2025 provides for the tax codes to be used for the payment of top-up tax on the F24 payment form.
On November 3, 2025, Finland issued a draft law for consultation to amend its Minimum Tax Act for the June 2024 and January 2025 OECD Administrative Guidance.
A Communique of October 29, 2025 issued by the MRA provides further information on QDMTT Notifications.
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