Pillar 2 and Tax Systems

If you’re reading this article, you’re already thinking about Pillar 2.

We’re here to help you not only stay informed but also get ahead, ensuring that your organisation is fully prepared for the upcoming changes required to be compliant.

What is Pillar 2?

As a short recap, Pillar 2 will establish a global minimum tax regime which will apply to both public and privately held multinational groups with consolidated revenue over 750m Euros.

Although the deadline for UK organisations to file their information return and calculations with HMRC isn’t until the 30th June 2026, businesses will be undertaking provision calculations for inclusion in their glossies for FY23. Irish businesses may be sooner still, but this is all yet to be confirmed.

Pillar 2 and Tax Systems

As you’d expect from the market leading provider of corporation tax compliance software in the UK, we’ll be supporting Pillar 2 compliance through our software.

It will enable you to prepare your Pillar 2 calculations for UK and Irish HQed groups, for submission to those regulators.

What challenges might Pillar 2 bring?

Pillar 2 will require you to source lots more information from across your entire global group – if this is dealt with using email and spreadsheets it’s going to be nothing short of painful.

Add to this the probability of local teams that don’t know what’s being asked of them (bear in mind the “local team” might be a general finance person rather than a tax specialist) – and this is going to be even harder.

How we can help

Simply put, we got this, so you don’t have to worry.

And we aren’t just looking at Pillar 2 from a compliance perspective – that’s table stakes.

To enable you to manage this fundamental change in your processes, with minimal impact on your teams we’re introducing questionnaire functionality. Questionnaires will allow your group to centrally ask what’s needed and provide the relevant context to minimise mistakes. So, rather than asking teams to complete detailed adjustment calculations (for example) in standalone Excel files, the whole process can be centralised into one team.

You’ll also be able to monitor progress and get data back in real-time, so you’re not sitting around waiting for your inbox to ping with Excel spreadsheet after Excel spreadsheet! And communicating requests in multiple languages won’t be a problem as you can load the questionnaires in Google Chrome, which will manage the translation for you.

Should I be doing anything now?

As mentioned earlier, UK organisations will have until the 30th June 2026 to file under Pillar 2 requirements. However, when talking with our customers, there are some who are choosing to do two things in preparation;

  • Working (typically with advisers) to understand data gaps and looking at their current systems to see how much of a gap they have.
  • Putting early disclosures into their annual reports (“glossies”) around possible future impacts, which may involve some high-level calculations.

So, if you want to get ahead, you too may wish to do something similar.

Stay ahead of the game with Alphatax Pillar Two

Alphatax Pillar Two fully complies with OECD and UK legislation whilst delivering advanced data management capabilities.​

​Launching in April 2024 – but in the meantime we’d be delighted to show you a demo of the solution now. You can also gain access to a pre-release version from January, to start taking advantage of the Pillar Two calculations.

Let’s go!

 

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