KPMG presents insights on navigating OECD tax guidelines

In October, Chan Yen San, Partner, Head of Professional Practice at KPMG in Singapore, shared insights at a seminar in the Netherlands organised by the Netherlands’ Tax Administration and the Ministry of Finance on behalf of the Organisation for Economic Co-operation and Development (OECD). The seminar brought together delegates from more than 60 countries and organisations to assess the effects and challenges of implementation of a 15 percent floor on corporate income tax rates.

Chan, the only participant from Singapore to make a presentation at the seminar, spoke at a well-attended side event that was organised in cooperation with the World Bank and International Bureau of Fiscal Documentation (IBFD). The event focused on opportunities surrounding compliance and implementation of Pillar 2 of the OECD’s base erosion and profit shifting framework (BEPS), including the Global Anti-Base Erosion (GloBE) plank, with a focus on the role of external financial auditors.

Chan outlined some of the key factors needed to ensure controls were robust. Country-by-country monitoring is an essential starting point for in-scope businesses, according to her, given the differing timelines in different countries for implementation of Pillar 2. Almost 40 countries enacted the relevant rules in 2024 and up to 60 are expected to do so in 2025, bringing some 95 percent of multinational enterprises under the ambit of the new regime, as outlined in KPMG’s ‘Fit for Pillar Two’ series. This prospect is focusing minds in the corporate sector.

As Chan explained, national-level assessment is important, because translating internationally agreed law for domestic implementation often leads to divergence in language, with potential discrepancies in substance. This can have a material impact on its application and in relation to the top-up taxes permitted under Pillar 2. To guide businesses in navigating the complexities of tax compliance obligations, KPMG leverages its global network and technological capabilities to offer an interactive online dashboard, the KPMG BEPS 2.0 Tracker, that allows visitors to check the status of GloBE in each country via a global map.

The importance of accurate national-level assessment extends to tests related to the transitional safe harbours permitted by the GloBE rulebook, another theme of the Amsterdam event. Such safe harbours offer interim relief to multinationals adjusting to the new environment. If they meet certain criteria, multinationals do not need to complete a full GloBE computation, but again, a careful examination of local implementation is necessary, Chan said.

While risks must be carefully evaluated, there are also opportunities for many countries broadly adopting the same rules. These include potential efficiencies in terms of standardising IT designs, simplifying onboarding across a wide variety of countries, and the ability to apply common risk filters and assurance systems on a global basis.

Other considerations include ongoing policy work such as, dispute resolution mechanisms, an information exchange framework, room for potential simplification, and permanent safe harbours. For these reasons, gatherings like the Amsterdam event will remain valuable to understanding the evolving context around BEPS, Chan said.

There are plans to extend the meeting into an ongoing Amsterdam Dialogue. This will be led by tax administrations and provide a structured, regular format within which revenue officials, corporate tax departments and other interested parties will gather to promote the exchange of real-world insights into how the GloBE initiative is performing as it moves from policy to practice. The external financial auditor, Chan added, has a critical assurance role to play here.