You Can’t Hurry…Global Tax Reform7th June 2022
Global tax reform can’t be rushed. That seems to be what jurisdictions (and the OECD) have learned from planning the implementation of Pillar Two. While the original deadline for implementation was 2023, the OECD’s aggressive tax planning unit has pushed back the minimum-tax roll-out to 2024—which makes sense as countries, like Switzerland among others, prefer to implement it effectively as opposed to just quickly. What does that mean for compliance? Since the international tax pact gives multinational corporations until 18 months after the last day of the fiscal year to file returns, companies won’t have to file returns reflecting Pillar Two until 2026. Pillar Two is a minimum tax of 15% for multinational companies with annual revenue above €750 million, and it allows jurisdictions to top up taxes if companies pay less than 15% in other jurisdictions. There are still many questions that have to be worked out where Pillar Two is concerned—but now, there’s more time to uncover the answers.