Helping Global Enterprises Adapt to the Pillar Two Tax Regime

The Organization for Economic Co-operation and Development (OECD) has introduced the Global Anti-Base Erosion (GloBE) Rules, known as Pillar Two, to ensure large multinational enterprises pay a minimum level of tax in each jurisdiction they operate. This significant shift requires multinationals to adapt their tax frameworks to comply with new obligations. A leading global consultancy collaborated with Phronesis Partners to understand and share the impact of this regime, aiming to guide multinational enterprises through these challenges.

Objective

The consultancy sought to provide proactive insights to its clients by:

• Gauging awareness of Pillar Two among organizations
• Evaluating the anticipated impact on global businesses
• Identifying implementation-specific challenges
• Assessing preparedness levels to address the new tax obligations

These objectives align with the goals to understand the audience, influence decision-makers, and stay ahead of trends and competitors.

Solution

Phronesis Partners employed a comprehensive research methodology.

Secondary Research:

Conducted detailed desk-based research to gather preliminary insights into the Pillar Two framework's operational, financial, and strategic impacts on global businesses.

Survey-Based Research:

Engaged senior tax and compliance executives from organizations with revenues over €500 million. The survey focused on:

• Level of awareness regarding Pillar Two
• Assessment of potential impacts, both positive and negative
• Cost implications for businesses
• Key issues and pain points
• Preparedness levels of organizations
• Planned steps to address the changes
• Best practices and recommendations for navigating the evolving landscape

Expert Discussions:

Validated survey results through discussions with tax experts to gain deeper perspectives on the implementation of the OECD Pillar Two tax regime and its potential impact on multinational corporations.

Impact

The collaboration resulted in a thought leadership report detailing the readiness and preparedness of multinational enterprises for the new tax regime. The report provided:

• Strategies for enterprises to navigate challenges during and after the transition
• Insights on leveraging external expertise and advanced technology solutions to manage the complexities of Pillar Two implementation effectively

This comprehensive guidance positioned the consultancy to offer valuable support to its clients, enhancing their ability to adapt to the changing tax landscape.