Many countries are currently amending their local laws to introduce a global minimum top-up tax1  as part of the international tax reform. This reform includes a two-pillar solution.

Pillar One aims to ensure a fairer distribution of profits and taxing rights among countries. Pillar Two aims to ensure that large multinational groups pay at least the minimum rate of 15 percent on income arising in each jurisdiction in which they operate.

The new Pillar Two tax laws are very complex and it may be challenging to estimate their impact. Engage with your tax specialists and your users to ensure that your 2023 annual financial statements provide meaningful and relevant information about your exposure to the top-up tax.

Irina Ipatova
Associate Partner, International Standards Group (ISG)

There are four mechanisms under Pillar Two that countries can adopt.  

To help you in preparing your 2023 annual financial statements, we answer your questions on the two key issues.

  • New disclosures: To compensate for the potential loss of information resulting from the mandatory deferred tax accounting relief, companies are required to provide new disclosures in their financial statements from 31 December 2023.
  • Impairment assessment: Companies may also need to reflect the impact of upcoming changes in tax laws in their 2023 impairment assessments. 

Global minimum top-up tax under the new OECD Pillar Two rules. Also referred to here as Pillar Two taxes.

GloBE – global anti-base erosion.

A country may introduce a minimum tax which does not qualify under the GloBE rules.

In development.