Podcast: Pillar Two pregame show - Episode 4

Podcast overview

The Pillar Two rules are expected to have a significant impact on the income tax provision and external audit process once they go live in the first quarter of 2024.

In this episode, KPMG Department of Professional Practice partner Matt Drucker, and Danielle Matthews, who is on rotation in the KPMG Department of Professional Practice, stop by to explain how to account for Pillar Two, discuss disclosures that may be required before the rules take effect, and highlight key areas that the external auditor is likely going to focus on, including what they may be asking for.

We close the episode by asking Matt and Danielle to put on their coaching hats and provide some practical tips on what companies can do now to facilitate a successful financial reporting and external audit process.

Want us to answer your Pillar Two questions in our mailbag episode? Submit them here before Nov 30!

Applicability

• Multinational companies with consolidated revenues of at least €750M

Relevant dates

• 2023 year-end reporting – Evaluate whether existing SEC rules require disclosure of the potential effects of Pillar Two
• January 1, 2024 – Pillar Two rules begin to go into effect
• Q1 2024 reporting – Account for the effects of Pillar Two in the interim tax provision

Podcast contents

• 00:15 - Introduction
• 02:15 - Are the Pillar Two top-up taxes considered income taxes?
• 03:10 - How Pillar Two will impact the tax provision
• 05:50 - Disclosure considerations before Pillar Two goes live
• 07:15 - Word association game: audit considerations for key Pillar Two concepts
• 12:25 - Coach's corner: practical implementation advice