Systems Changes

The Transitional CbCR Safe Harbour is a short-term measure that will allow an MNE to avoid undertaking detailed GloBE calculations for a jurisdiction if certain requirements are met. Data will need to be extracted from the CbC Report, financial statements and ERP and EPM systems. Group structure information will also be required.

The GloBE Information Return will require information on an MNEs corporate structure in so far as it impacts the application of the Pillar Two GloBE rules. In this article we look at the data points that are required to comply with this.

In this first of a series of articles that will break down all of the data points for the purposes of the Pillar Two GloBE rules (and in particular the expected reporting in the GloBE information return), we look at the UPE data points in the corporate structure.

MNEs within the scope of Pillar 2 are well advised to carry out a Pillar 2 Impact Assessment. In this article we look at the approach to a Pillar 2 impact assessment.

Undertaking an early Pillar Two Impact Assessment allows MNE groups to identify potential top-up tax, ascertain and implement changes to processes and systems and provides time to consider restructuring to efficiently plan for Pillar Two. 

In this 35-page report we take a systems-based approach to the GloBE rules and look at effective systems implementation to allow the Pillar Two GloBE ETR calculations to be undertaken.

The specific treatment of dividends and other distributions under the Pillar Two GloBE Rules raises some interesting issues and opportunities in blending such payments between otherwise low-taxed entities and holding companies to reduce any potential top-up tax liability.