Pillar Two is a cross-functional challenge—here’s how tax can take the lead

Corporation Tax International Tax
30 August 2025

Complying with Pillar Two isn’t something the tax function can achieve in isolation. From data integrity to reporting architecture, the rules reach into finance, legal, and IT. But with the right approach, in-house tax can lead the collaboration needed to deliver compliance without disruption.

Pillar Two touches more than tax

The GloBE rules require accurate, auditable, and jurisdiction-specific data, much of which sits outside the tax team’s immediate control. That includes:

  • Intercompany arrangements and legal entity ownership structures
  • Consolidation rules and deferred tax positions
  • Enterprise resource planning (ERP) configuration, data warehousing, and reporting protocols

As Ross Robertson (BDO LLP) put it in a recent Tolley webinar:

“The data sits everywhere. Tax has to work harder to extract it, validate it, and explain it, because auditors and authorities will ask how you got there.”

Without coordinated input, even simple compliance steps can fail.

Three departments you must partner with now

Finance

Finance owns much of the consolidation logic, materiality thresholds, and journal-level data that drives the effective tax rate. Tax must:

  • Align on data definitions and source systems
  • Validate how adjustments (e.g. impairments, recharges) are captured
  • Agree handover points and deadlines within the group close cycle

Legal

Legal teams influence the corporate structure, intra-group contracts, and local entity documentation, all of which shape jurisdictional risk. Tax should:

  • Stay updated on restructurings or entity changes
  • Collaborate on entity-level ownership or substance tests
  • Ensure legal documents reflect economic substance needed for Pillar Two reporting

IT

ERP systems, reporting tools, and third-party compliance platforms must all interconnect to produce reliable Pillar Two outputs. Tax leaders must:

  • Map data flows across systems
  • Identify and patch any reporting gaps
  • Define technical requirements for GloBE compliance tools

“Technology helps, but it’s the process behind it, and the collaboration across functions, that really counts.” – Ross Robertson, BDO LLP

How tax can lead a cross-functional compliance programme

  • Establish a Pillar Two steering group involving finance, legal, IT, and compliance leads
  • Develop shared documentation standards and data handover protocols
  • Use Pillar Two as a lever to improve enterprise-wide tax awareness
  • Create visibility for key dates (e.g. CbCR finalisation, Globe Information Return submission, safe harbour testing and election deadlines)

In many groups, Pillar Two has become the catalyst for long-delayed transformation. It’s an opportunity to reposition tax not just as a subject-matter expert, but as a strategic coordinator.

Cross-functional compliance in practice: a checklist

  • Have we agreed which team owns which Pillar Two data fields?
  • Is there a shared calendar showing key tax and finance milestones?
  • Do local finance teams know what information tax will need and when?
  • Are intercompany contracts structured to support local substance tests?
  • Does our ERP produce Pillar Two-compliant reports, or do we need middleware?

Pillar Two is complex, but the compliance roadmap becomes far more manageable when tax leads a coordinated, forward-looking response.

Watch the full webinar here

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