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February 15, 2023

Will BEPS 2.0 lead to a more integrated finance and tax function ?

Organizations bracing themselves for the new BEPS 2.0 Pillar Two global minimum tax rate face a daunting rise in reporting requirements. This includes generating between 150 and 200 data points – many of which are new.  Organizations must understand and implement the detailed Pillar Two reporting process regardless of whether their effective tax rate (ETR) is likely to fall below the new global minimum of 15% because they will either need to comply or show that rules do not result in additional liability. This increased reporting obligation will require enormous additional resources from multinational enterprises (MNEs). It will also involve a wide range of functions – including tax, finance, human resources and IT – to collaborate closer than ever to create new data-gathering processes. This investment in time, money and effort will be significant, but the companies capable of future-proofing their systems by automatically sensitizing tax data at source are likely to enjoy benefits far beyond the remit of BEPS 2.0 Pillar Two.

This EY article focuses on the data challenge created by Pillar Two and how it also presents the finance and tax functions with an opportunity to future-proof their data streams.