Pillar Two: Are you #PillarTwoReady?

Pillar Two establishes a global minimum tax regime which will apply to both public and privately held multinational groups with consolidated revenue over €750m. Global agreement has been reached to bring these rules into law and the OECD has released model rules, commentary and administrative guidance.

EU member states have unanimously adopted a directive requiring them to introduce the rules by 31 December 2023. Many other countries are also working on their domestic rules to implement Pillar Two.

UK legislation has been enacted which introduces the OECD’s Pillar Two model Income Inclusion Rules into UK law. The rules first apply to accounting periods commencing on or after 31 December 2023. Whilst the UK has addressed some of the issues and complexities raised in respect of the OECD model rules a number still remain. These issues and complexities are being addressed through the OECD Implementation Framework workstream (“IF”) which is due to be completed by the end of 2023.

Following the latest batch of Administrative Guidance recently issued by the IF the UK has released a draft Finance Bill to incorporate the necessary changes. As further guidance is to be issued over the course of the year we anticipate further changes to the UK rules.

Notwithstanding that further changes may be made to the UK Pillar Two rules, groups falling within the scope of the minimum taxation rules are best served by undertaking an initial impact assessment now. The impact of Pillar Two on the end-to-end operations of the tax department is unprecedented. Companies will need to ensure they have the data needed to forecast and model in the interim as well as the data to maintain reporting and compliance requirements upon enactment. In addition to Tax, there are several key stakeholder groups within the organisation, including Financial Reporting and IT that will be impacted by the impending changes. One of the common challenges many companies will face is a gap in resources to lead such a broad Pillar Two Readiness initiative. Amongst others, the person in this lead role must be able to address the questions and challenges across four broad categories: People, Process, Data and Technology.

Given the tight timeline, the key actions to start the journey to be #PillarTwoReady are to understand, evaluate, and model the impacts of Pillar Two across the organisation. This includes, but is not limited to, assessing the additional data and reporting/compliance requirements, evaluating the existing technology ecosystem and capabilities, establishing processes and controls, preparing and training resources, and managing stakeholder expectations.

It starts now!

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PwC's Pillar Two Engine

How we can help


We help assess and model the likely financial and operational consequences of Pillar Two.

Services include:

  • Training and upskilling your staff on Pillar Two
  • Initial modelling to both understand both Pillar Two financial and process impact on key jurisdictions and assist in briefing internal stakeholders
  • Deep dive on key jurisdictions to identify both Pillar Two financial impact and data gap impact
  • PwC Data Input Catalog to identify required data points and build a data strategy to efficiently collect these
  • Assessment of where tax department is on its transformation and technology journey
  • Assessment of whether it may be beneficial to make structural changes
  • Stakeholder communications.


We can enhance your reporting and data analytics capabilities.

Services include:

  • Detailed modelling to provide the data for financial disclosures using PwC’s Pillar Two Engine, a centralised rules engine vetted by PwC global technical and policy leaders, producing provision and compliance grade calculations and auditable reports
  • Validate deferred balances ahead of first Pillar Two reporting period
  • Updates to ERP/CPM processes
  • Review tax reporting process and the use of technology to automate / streamline
  • Consulting on tax accounting treatment, review of disclosures.


We help you meet your ongoing reporting and compliance obligations.

Services include:

  • Aligning Pillar Two with your existing compliance and reporting cycle using our Connected Tax Compliance approach and PwC’s Pillar Two Engine
  • Support the development and configuration of modelling and compliance solutions using your existing systems (such as Oracle, SAP, OneSource, Longview etc) or your internally developed solution
  • Documentation of Pillar Two related processes and controls to align with tax governance frameworks.

Contact us

Matt Ryan

Matt Ryan

Partner, Tax, PwC United Kingdom

Tel: +44 (0)7718 981211

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