Cloud-based software for advanced Pillar Two analytics and insights.
Our Pillar Two Tax Engine allows you to model the impact of the Pillar Two GloBE Rules and any top-up tax liability, determine best and worst-case scenarios and simulate the impact of making various GloBE elections.
Our Pillar One Modelling Tool provides a calculation of the estimated profits reallocated to jurisdictions under Amount A of Pillar One and the estimated corporate income tax on those reallocated profits.
Given Pillar One feeds directly into Pillar Two, it also estimates the Pillar Two top-up tax liability after the application of Pillar One.
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For Pillar Two purposes, investments in fixed assets can involve an interaction between deferred tax impacts and the the substance-based income exclusion.
Our interactive map covers the current global treatment of VAT on digital services. Fully cited with links to relevant laws.
Our interactive map breaks down worldwide corporate income tax rates to identify jurisdictions with a headline CIT rate below the Pillar Two 15% rate.
Our Global Digital Services Tax Tracker allows you to stay up to date with international digital service taxes. Cited and with links to domestic legislation.
Our OECD Pillar One Modelling Tool is designed to provide an analysis of the high-level impact of Amount A of Pillar One.
Our Investment Companies Top-Up Tax Calculator models the impact of Pillar Two in a jurisdiction where there are a mix of investment and non-investment companies.
The Revenue Sourcing Rules for Amount A are used to determine where an in-scope multinational group derives its revenues. This is then used in the profit reallocation calculation.
Use our interactive tool to quickly determine the relevant sourcing rule for each revenue type.
Our GloBE Loss Election interactive tool allows you simulate the impact on your top-up tax liability depending on whether a GloBE Loss Election is made or not.
Our Qualified Domestic Minimum Top-Up Tax (QDMTT) interactive tool allows you simulate the impact on your top-up tax liability depending on whether the domestic top-up tax is a QDMTT or is non-qualifying.
The UK published draft legislation on July 20, 2022, to implement a ‘multinational top-up tax’ in line with Pillar Two of the OECDs Two-Pillar Solution. We have produced a calculator to illustrate the key aspects to the calculation of the multinational top-up tax.
This Pillar Two under-taxed payments rule (UTPR) calculator gives an indication of the broad operation of how the top-up tax is allocated to UTPR jurisdictions.
When allocating taxes to group entities for the purpose of the Pillar Two rules, tax paid by a parent entity under a controlled foreign company (CFC) regime is usually allocated to the CFC entity. However, under Pillar Two, this is subject to a limitation. Use our interactive tool to see the impact of the CFC pushdown limitation.
Our deferred tax recapture tool simulates the impact of the Pillar Two rule that recaptures deferred tax liabilities that are not paid within five years.
Deferred Tax has a significant impact on the Pillar Two effective tax rate (ETR) and therefore on any top-up tax that may be levied. Use our Pillar Two Deferred Tax Liability Calculator to model the impact on the Pillar Two top-up tax.
On July 11, 2022, the OECD released a progress report on its Two Pillar Solution. This included draft rules on Pillar One. Whilst these draft rules are subject to a consultation, they nevertheless make interesting reading, particularly as there has, to date, been very little detailed information on the marketing and distribution profits safe harbour. Use our Pillar One profit allocation calculator to see the impact of the profit reallocation and marketing and distribution profits safe harbour.
Our capital gains carry back tool models the impact of making a Pillar Two election to spread capital gains. View different scenarios by changing gains and losses.
Our Pillar Two Rapid Assessment Tool, simulates the impact of the Pillar Two GloBE Rules. It is a slimmed-down version of our Pillar Two Tax
Deferred Tax is a key element of the Pillar Two Rules, aimed at smoothing out the effective tax rate to address timing differences. This simple Pillar Two deferred tax calculator shows the broad operation of a deferred tax asset and its impact on the effective tax rate and top-up tax.
The Subject-to-Tax Rule is a key element of Pillar Two, and allows source jurisdictions to levy additional tax on certain payments. Read what you need to know.
MNE groups should pay careful attention to any group financing companies in light of the Pillar Two Rules. In this analysis we look at the impact of Pillar Two.
In this article we look at some of the key drivers that can result in Pillar 2 ETR’s being significantly different to the headline domestic tax rate.
The Netherlands has issued Parliamentary Paper 22112 (3278) in which it provides comments on the EU’s proposed directive for the implementation of Pillar Two.
The requirements for a participation exemption under domestic law may not match the exemption requirements in the Pillar Two Rules. Read our analysis.
For Pillar Two purposes, investments in fixed assets can involve an interaction between deferred tax impacts and the the substance-based income exclusion.
In this article we look at the interaction between deferred tax on bonus depreciation and the substance-based income exclusion on investments in tangible assets.
Whether multinationals adopt a centralized or decentralized approach to Pillar Two will be one of the key factors in correctly establishing the systems and architecture to collect, manage, analyse and store source data for the Pillar Two effective tax rate and top-up tax calculation.
IAS 1, IAS 10 and IAS 12 all have provisions that can impact on the required disclosures in financial statements for Pillar Two, however, the key determinant will be whether the domestic tax law to implement the Pillar Two GloBE Rules has been announced, substantively enacted, or enacted before the financial statements are issued.
Our interactive map covers the current global treatment of VAT on digital services. Fully cited with links to relevant laws.
It’s been reported that Barbados is to ask the OECD for more time to implement the Pillar Two GloBE Rules. Exactly what Barbados expects is still unclear.
Germany, France, Italy, Spain and the Netherlands issued a joint statement stating that if agreement is not reached on Pillar Two in ‘the next few weeks’ they will push forward domestic implementation of the Pillar Two GloBE rules ‘by any possible legal means’ in 2023.
Identifying the data points required to apply the Pillar 2 rules is the first step in any tax data mapping MNEs undertake. We list the key 122 data points.
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.
Our interactive map breaks down worldwide corporate income tax rates to identify jurisdictions with a headline CIT rate below the Pillar Two 15% rate.
Item 17 of the third relief package (issued September 4, 2022) states that Germany will start implementing Pillar 2. Read our initial thoughts on its enactment.
Our Global Digital Services Tax Tracker allows you to stay up to date with international digital service taxes. Cited and with links to domestic legislation.
In most cases, a Qualifying Refundable Tax Credit will result in a higher Pillar Two effective tax rate than a non-qualifying tax credit. However, this is not always the case. We look at some examples in this article.
Whilst Pillar 1 and Pillar 2 are separate and independent of each other, there are areas where they overlap, most notably the inclusion of Pillar 1 tax for Pillar 2 purposes and the overlap in some of the adjusted profits definitions.
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.
Our OECD Pillar One Modelling Tool is designed to provide an analysis of the high-level impact of Amount A of Pillar One.
Our Investment Companies Top-Up Tax Calculator models the impact of Pillar Two in a jurisdiction where there are a mix of investment and non-investment companies.
The Amount A elimination of double taxation provisions in Title 5 of the Progress Report on Amount A of Pillar One apply to prevent a multinational group being taxed twice on profits allocated to a market jurisdiction where there is already some form or physical establishment that is subject to tax.
On July 22, 2022, South Korea released a draft law to implement the OECD’s Pillar Two GloBE Rules (the ‘draft law’) in legislative notice 2022-128. Read our analysis.
On August 17, 2022, the Swiss Federal Council issued a draft decree for the implementation of Pillar Two of the OECDs Two Pillar Solution from January 1, 2024. Read our detailed analysis.
The Revenue Sourcing Rules for Amount A are used to determine where an in-scope multinational group derives its revenues. This is then used in the profit reallocation calculation.
Use our interactive tool to quickly determine the relevant sourcing rule for each revenue type.
The Amount A reliable indicators are the practical methods of allocating revenue to jurisdictions for the purposes of the Pillar One, Amount A revenue sourcing rules.
Allocation Keys are a key aspect of the Amount A Revenue Sourcing Rules, which attribute revenue to the jurisdictions an MNE group operates in. This is then used when determining how much profit is reallocated to a jurisdiction.
The marketing and distribution profits safe harbour is included in Articles 6(3)-(6) of the Progress Report on Amount A of Pillar One. It is deducted
A key issue with a distribution tax regime such as Estonia’s is that a company may not distribute profits for a number of years. They would have GloBE income but no or limited tax suffered on that income which would lead to a sizeable Pillar Two top-up tax liability. As such a distribution tax regime election is available.
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