A practical overview of the UK Pillar Two regime, who it affects and the preparation large groups should consider.
Why this matters
Groups within scope face new effective tax rate calculations, jurisdictional reporting and additional disclosures. The data required sits across multiple legal entities, accounting systems and tax filings.
What groups should consider
- Whether the group meets the consolidated revenue threshold
- Which jurisdictions are likely to produce top up tax
- How data will be collected consistently across the group
- Interaction with existing tax compliance and country by country reporting
- Timing of registration and notification obligations in the UK
Common issues or warning signs
- Tax provisioning processes that cannot produce jurisdictional effective tax rates
- Group accounting policies that differ from local statutory accounts
- Acquisitions, joint ventures or restructurings that complicate the calculations
- Reliance on manual workings to capture data from many entities
Practical steps
- Confirm scope and identify all in scope entities
- Carry out an early effective tax rate dry run
- Strengthen the data flow from local finance teams to group tax
- Document policies, judgements and transitional safe harbours used
How Bracknwell Partners can help
We support international groups with Pillar Two scoping, dry run calculations, policy work and the practical changes needed in reporting and data processes.