beps-pillar-two-assessment

To calculate the OECD Pillar Two top-up tax, you compute the jurisdictional Effective Tax Rate (ETR) from adjusted covered taxes and GloBE income, then derive the top-up amount where the ETR falls below 15%. This requires applying the IIR, UTPR, and QDMTT mechanisms by jurisdiction.

A GloBE income ETR assessment requires consolidated and entity-level financial statements, along with payroll and tangible asset data for calculating carve-outs. These inputs allow the assessment to compute adjusted covered taxes, SBIE, and Excess Profit for each jurisdiction.

Pillar Two rules apply to multinational groups with cross-border operations that exceed the 7.5 billion EUR consolidated revenue threshold. If your group surpasses this revenue limit, you must evaluate your tax compliance under the IIR, UTPR, and QDMTT mechanisms.

You calculate the SBIE and Excess Profit by estimating payroll and tangible asset carve-outs based on your financial data. The assessment uses these carve-outs to derive the Excess Profit, which is then used to estimate the final Top-up Tax for low-tax jurisdictions.

The IIR, UTPR, and QDMTT mechanisms determine how top-up taxes are allocated and collected across jurisdictions within your multinational group. A Pillar Two assessment reviews how your group is affected by these mechanisms, including their priority and any applicable safe-harbor or transition concepts.

Yes, you can use consolidated and entity-level financial statements to quantify which low-tax jurisdictions generate top-up tax amounts. The assessment calculates your jurisdictional ETR and applies the 15% minimum tax rate to identify jurisdictions requiring top-up tax payments.