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Why MNEs Should Reassess SPVs in Light of Pillar Two

Summary MNEs use Special Purpose Vehicles (SPVs) for a variety of reasons, some of which are not tax-related.

However, the nature of the Pillar Two GloBE Rules means that in some cases, SPVs can be extremely inefficient from a tax perspective, particularly if they are located in a low-tax jurisdiction. They could result in excess Pillar Two top-up tax for the group.

In this article, we look at the reasons why this could be the case.

What is the Issue?

Let’s take this scenario:

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Lee Hadnum

Lee is a qualified Chartered Accountant and a former Senior Tax Analyst at Bloomberg Tax. Lee began his career in Ernst & Young's Entrepreneurial Services department and has 20 years of international tax planning experience.

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