Tax leaders preparing for Pillar Two impact

A vast majority of tax leaders from multinational enterprises (MNEs) are preparing for the impact of international tax changes resulting from OECD’s Pillar Two project, Deloitte’s 2023 Global Tax Policy Survey has revealed.

As per the survey, more than 80 percent of respondents expect that a critical mass of countries will implement an Income Inclusion Rule (IIR) under Pillar Two by 2025; and Undertaxed Profits Rule (UTPR) by 2026.

34 percent of respondents expect that Pillar Two will result in a significant increase in their group’s global effective tax rate. 56 percent of the respondents have undertaken at least some kind of modelling of the impact of Pillar Two on their tax profiles.

However, most tax leaders do not expect that the implementation of Pillar Two will cause them to make significant changes to their corporate structure.

The survey was conducted between January and February 2023. More than 200 tax leaders from multinational companies across 28 countries responded to the survey.