Pillar Two, the OECD’s global minimum tax, requires multinational groups with consolidated revenue of at least 750 million euros to pay an effective rate of at least 15 per cent in every jurisdiction where they operate. For groups with a December year end, the first GloBE Information Return fell due on 30 June 2026, 18 months after the close of the 2024 transition year.
That deadline has now passed for most of the groups in scope, and the temptation is to treat the return as filed and move on. The contributed piece below argues the opposite: that the first filing was the start of a permanent compliance function rather than the end of a project, and that the shorter 15-month window for every subsequent year leaves less room to rebuild the process from scratch.
Russell Gammon is chief innovation officer at Alphatax, the global tax compliance software provider. He has
worked in tax technology for 13 years, starting his graduate career at Deloitte in 2008, and has been with Alphatax since May 2020, where he leads the team responsible for investment in cloud technology and the build and roll-out of its new tax digitisation platform. The article that follows sets out his opinion.
For multinational tax teams, Pillar Two has been an enormous undertaking. Some of the largest organisations spent several years preparing for the new regime, bringing together unfamiliar data and determining how to calculate and file across multiple jurisdictions.
Given the scale and uncertainty involved, it is unsurprising that many approached the first filing as a major standalone project. The priority was getting it right and submitted by the deadline.
Now that the first major deadline has passed for many, organisations have more experience and a much clearer idea of what Pillar Two requires in practice. But just as tax teams are getting to grips with the process, the rules around it will continue to evolve.
The challenge now is to turn everything learned from year one into a sustainable approach to ongoing compliance, while adapting to the shorter 15-month filing period.
From first filing to long-term approach
Multinational organisations used a variety of approaches for their first Pillar Two filing. Some fully outsourced the process, very few did it all in-house, and the majority took a co-sourcing approach, doing a lot of it themselves and using external advisers for specific areas. This is one of the first times we have seen the co-sourcing approach used from the outset, and it offered a great middle ground for organisations to retain control of their data and technology while advisers provided specialist input and assurance.
The reliance on external advisers made sense for year one. The regime was new, complex, and still being interpreted, so reducing risk was the priority. Now, however, tax teams have first-hand experience of the process. They know where the data comes from, which activities create the most work and where external expertise adds the most value.
That is likely to change the balance in year two. Organisations that relied heavily on advisers may look to bring some of those activities in-house, while continuing to use external support where specialist interpretation or assurance is required. This approach may also vary by jurisdiction, with some filings managed largely in-house and others outsourced depending on their complexity and local requirements. The focus should be less on recreating the project that delivered the first filing and more on building the capabilities needed to manage Pillar Two as an ongoing part of the tax function.
Pillar Two is not standing still
There is, however, an important complication. Just as organisations become more familiar with Pillar Two, it will continue to change.
We already know some of what is to come. The current country-by-country reporting-based temporary safe harbour will give way to a new permanent regime, including the Simplified Effective Tax Rate safe harbour. These tests will be more closely aligned with financial statements and introduce further adjustments and elections, requiring organisations to revisit their data and calculations.
Organisations may also move in and out of safe harbours on a jurisdiction-by-jurisdiction basis. This could add complexity if a jurisdiction moves back into full GloBE calculations and historic data needs to be revisited.
Other details are still settling. The simplified GloBE Information Return will change reporting for some groups, while local implementation and filing mechanisms will continue to develop. Some jurisdictions already have automated or XML-based submission processes, while others still rely on manual file uploads. More jurisdictions are likely to move towards XML or direct submission over time, creating further system changes for multinational tax teams.
While the broad framework may now be established, the detail around it remains fluid. Next year’s process, therefore, will not simply be a repeat of the first.
From project to operating system
Organisations need to think beyond the next compliance deadline and create a model built to absorb complexity and adapt to changing requirements.
At the heart of that model should be a shared data foundation. Pillar Two already requires information from across the tax function, including provisioning, country-by-country reporting, and other financial data, to come together in a consistent and auditable way. Yet many tax functions still operate through disconnected processes and systems. The same underlying information may be collected several times, updated in different spreadsheets, and reconciled before it can be used with confidence.
A more effective model is one where underlying data is updated once, with any change flowing consistently through the relevant tax processes and calculations. This creates a single, controlled source of information that can support different reporting requirements without creating separate versions of the truth.
This reduces manual effort and the need for repeated reconciliation, but importantly it also creates flexibility. As regulatory and filing requirements evolve, organisations can adapt the relevant process without rebuilding the data journey underneath it.
Technology alone cannot deliver this. Organisations also need connected workflows, clear ownership, and consistent governance around their data. Advisers can still provide specialist expertise, but they can work from the same underlying information as the internal tax team, while technology handles more of the repeatable work.
The result is an operating system where compliance data becomes an asset that can be reused across the tax function rather than simply an output produced for an individual deadline.
Pillar Two may continue to evolve for years to come, but organisations do not need to keep reinventing how they manage it. Those that build around a shared data foundation and connected operating system will be better placed to absorb changes in the rules, reduce the cost and effort of ongoing compliance, and approach each new filing as part of an established process rather than another major project.
The post After The First Pillar Two Filing: Build The Operating Model appeared first on The Fintech Times.
