BEPS Pillar II has dramatically changed the international tax landscape, potentially bringing significant reporting and compliance challenges to every industry. It’s one of the most complex international tax laws in a century and came into effect in Ireland in January 2024.
Government tax policymakers around the world are collaborating on proposals for significant changes to international tax rules in light of the globalization and digitalization of the economy. BEPS Pillar II is the most significant set of rules introduced to date by the BG20/OECD project on addressing the taxation of digital economy which began in 2019
The Pillar II rules on new global minimum tax were approved in December 2021 by 141 jurisdictions participating in the project. These Rules provide for a global minimum tax of 15% applicable to multinational enterprise groups with a global turnover of €750 million or more.
Most multinational enterprises will be affected by Pillar II of the Base Erosion and Profit Shifting initiative (BEPS) – which aims to ensure companies pay their fair share of tax in every jurisdiction where they operate.
Watch our short videos below which outlines what it takes to comply, why you need to start preparing now, and how EY teams can help.
How can companies in Ireland prepare for Pillar II?
In order to prepare, companies need to find ways to calculate their new taxes, evaluate the impact on their financial statements, and report to the relevant tax authority. This will mean potentially adapting their internal processes and systems to manage the new computations and data requirements so they can calculate their global minimum tax liabilities and satisfy reporting obligations. The charts below set out the key milestones across the coming years in terms of preparing for this.
For more information on BEPS 2.0 sign up here to watch our recent webcast: New OECD releases and ongoing implementation activity.
What EY Ireland can do for you?
Our Tax team here in Ireland can work with you to develop a robust, actionable plan so that you are ready when the rules are enacted and effective. We can also draw from an integrated global team of local and international tax, tax compliance, and tax technology professionals to help our local clients navigate the complex rules and assess potential impacts of this new international tax.
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If you would like more information on how EY's team of experts can help, please reach out today.