As a result of the global agreement reached by the Inclusive Framework made up of more than 130 countries, representing more than 90% of global GDP, in December 2021 the OECD presented the model rules for Pillar 2, which propose the introduction of minimum effective taxation 15% to multinational companies whose consolidated income exceeds 750 million euros.
Following the publication of the Pillar 2 model rules, and in order to ensure their application in a coherent and uniform manner in all member states, in December 2022 the European Union approved directive (EU) 2022/2523 on the guarantee of a global minimum level of taxation, the transposition of which had to be completed by the member states before December 31, 2023.
The entry into force of Pillar 2 represents a before and after for the global taxation of companies. In this sense, more than 70% of the companies that have responded to the Business Pulse group, promoted by KPMG and La Vanguardia, are within the scope of application of Pillar 2. However, this new regulatory framework, in addition to affecting The impacted companies may also have collateral effects for the rest of the organizations, which operate in a highly connected and globalized economic and business environment.
Among the challenges that the companies surveyed face in adapting to this new global minimum tax, 86% highlight that of carrying out an impact analysis to identify which jurisdictions in which the group is present may be affected by the new tax. , implying an increase in tax pressure. 71%, for their part, also point out that preparing the organization from a tax governance and tax compliance perspective to comply with the new regulatory requirements is key.
Aware of this new reality, the business community will need to analyze these new challenges, adapt processes and reflect on the impact, direct or indirect, that this new tax will have within their organizations. So much so that all of the corporations that responded to the survey claim that they have carried out or plan to carry out this impact analysis. All of this with the aim of identifying the particularities that the complex rules of Pillar 2 may have in each specific case and identifying the entities owned by the group that may be affected by the minimum tax. Likewise, it is a priority for the groups to anticipate to what extent they will be able to access the temporary simplification mechanism, known as safe harbors, which will allow in some cases to alleviate, for up to three years, the calculation and formal obligations that the new tax entails. For their part, 90% are already working or plan to work on identifying the data that will need to be collected in order to be prepared to properly submit Pillar 2 tax returns; To this end, the affected organizations are already developing a roadmap for the implementation of the project in the group.
Digitization, in turn, plays an essential role in addressing the complexity associated with the data that this directive entails. In fact, more than 90% consider it necessary for Pillar 2 projects to be part of the digitalization strategy of the tax function of companies. It is not surprising, therefore, that more than 80% of the participating companies have resorted or plan to resort to external aid, total or partial, to cover this need. At this point, it seems notable that more than half of these companies will look for a service provider that combines both Pillar 2 technical and technological know-how. On the other hand, a very smaller percentage (18%) opts to rely solely on internal teams to achieve this objective.
In addition to promoting digitalization to address these regulations, the organizations that responded to the survey also focus on ESG issues. Without going any further, 93% believe that they should face the challenge of adapting to this new framework also from an ESG strategy perspective, thus allowing them to generate a positive impact on the markets and public opinion.
In short, the responses of the companies, based or operating in Catalonia, that responded to the survey reveal the importance and impact that this new regulation is having for international taxation within organizations. In addition to facing the numerous implications and challenges that this new regulation entails, Pillar 2 represents an opportunity to redefine and optimize processes, improve communication and transparency, and establish more exhaustive control of the companies’ actions and operations.
