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With the OECD Pillar Two rules now live in many jurisdictions and first Globe Information Returns due mid-year, June marks a critical moment for UK-based multinationals. The risks of missed safe harbours, flawed disclosures or inconsistent data are high but avoidable.
Here’s some of the key insights from the Tolley webinar “Pillar Two Reform: UK and Global Impact” hosted by Moniza Syeda with expert panellists Ross Robertson (BDO LLP), Jordan Gill (Alvarez & Marsal), and Raffaele Russo (Chiomenti Law Firm).
“The CbCR is now a central cog in the compliance process,” said Ross Robertson, Partner at BDO LLP. “Groups have had to go back to basics and refine how that report is built to make it fit for safe harbour qualification.”
Transitional CbCR safe harbours (TCSH) can materially reduce compliance burdens, but only if your Country-by-Country Report qualifies. Now’s the time to:
Fail this, and you'll face full Globe calculations in all jurisdictions concerned.
“Technology can’t think it needs structured, accurate data and technical analysis done upfront,” Robertson emphasised.
Your tech stack must now be capable of:
“If you break the safe harbour in Year 1, you lose it for all three years. The stakes are high.” – Ross Robertson, BDO LLP
Top-up tax will be visible in financial statements and scrutinised by auditors and tax authorities. In-house teams must work closely with finance:
Pillar Two: Overview and Details of the UK’s Domestic and Multinational Top-Up Tax Provisions Effective from 31 December 2023
Smaller subsidiaries still carry big compliance responsibilities. Jordan Gill, Director at Alvarez & Marsal, highlighted that “in many jurisdictions, tax is a new concept, data extraction is difficult, and technical expertise is limited.”
Action steps:
“Groups must not overburden subsidiaries, but they do need consistent, quality input from them.” – Jordan Gill, Alvarez & Marsal
June may close off FY23, but UTPR rules and new domestic minimum top-up taxes (QDMTTs) will escalate in FY24. Compliance will get more complex.
Smart in-house teams are:
Raffaele Russo, Partner at Chiomenti, noted: “The complexity of full Globe calculations, especially where safe harbours don’t apply, really calls into question whether your tax and accounting teams are equipped to work seamlessly.”
Act early. Avoid surprises. Protect your safe harbour.
Use Tolley+ tools to validate your CbCR, automate Globe Information Returns, and manage your compliance workflow.
Watch the full webinar here