Why Tax Data Mapping for Pillar Two is Crucial
The tax data mapping assessment is the cornerstone for MNEs looking to implement an effective approach to manage Pillar Two. All systems changes flow from this.
The tax data mapping assessment is the cornerstone for MNEs looking to implement an effective approach to manage Pillar Two. All systems changes flow from this.
A number of the adjustments to the deferred tax expense under Pillar 2 will mean significant changes to ERP systems. See our list of all required adjustments.
Many of the deferred tax data points are not stand-alone data sources but arise as a result of further calculations that are themselves based on underlying data-sources. There is therefore a ‘layering-up’ of data before the GloBE calculations can be effectively made.
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.
In this article we take a comprehensive look at how the substance-based income exclusion applies including the various adjustments for permanent establishments and flow-through entities and the data points 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.
In this article we look at some of the most significant issues to consider including the determination of when and how deals can bring groups within the scope of Pillar Two, specific considerations for private equity funds, differences in GloBE and domestic tax treatment and potential restrictions on post-acquisition transfers.
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.
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