Getting ready for OECD Pillar Two

7 snips

Jan 30, 2024

Exploring the revolutionary OECD Pillar Two global tax system for multinational companies, its impact on businesses worldwide, the four operating rules, enactment timing, implications for US companies, mechanics comparison, practical considerations, data and controls implications, and final advice.

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Introduction

00:00 • 2min

Understanding OECD Pillar Two Global Minimum Tax System

01:32 • 9min

Navigating Tax Gap Calculations and OECD Pillar Two Implications

10:06 • 14min

Exploring Tax Credit Variations and International Tax Implications

24:29 • 2min

Exploring the Complexities of Tax Rules and Planning

26:24 • 2min

Navigating OECD Pillar Two Implementation Challenges

28:45 • 19min

Navigating the Challenges of OECD Pillar Two Preparation

47:29 • 2min

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This week, we begin a collaboration with another popular PwC podcast. Host Heather Horn is joined by Doug McHoney, PwC International Tax Services Global Leader and host of the “Cross-border Tax Talks” podcast. Doug shares insights on the revolutionary new global tax system — the Organisation for Economic Cooperation and Development (OECD) Pillar Two framework — and its impact on companies worldwide.

The objective of Pillar Two is for large multinational enterprises to pay a minimum level of tax (a threshold effective tax rate of 15%) on the income arising in each jurisdiction where they operate. Doug joins us to shed light on the judgments involved and what companies can do to prepare.

In this episode, you will hear:

3:15 - A refresher on Pillar Two, the first global tax system for multinational companies, including:
- 4:30 - A breakdown of the four operating rules prescribed by the framework and the breadth of impact on companies worldwide
- 11:00 - An overview of enactment timing and the three-year transitional safe harbor provisions
13:35 - A discussion of the intersection between Pillar Two and US tax policy, including the impact on US companies
18:09 - A comparison of the mechanics of Pillar Two and current practice, including an overview of key tax adjustments
28:50 - Practical considerations, including materiality considerations, for companies preparing to comply with Pillar Two
36:15 - Data and controls implications as companies revamp tax policies and procedures
41:50 - Final advice for companies looking to achieve operational readiness for Pillar Two

For more on OECD’s Pillar Two, read our publication, Global taxation: More than an idea - what it means for you now, as well as our prior podcast, Tax policy update - OECD and domestic minimum taxes.

Additionally, check out PwC International Tax Services’ “Cross-border Tax Talks” podcast, and follow both podcasts on your favorite podcast app for upcoming episodes.

Doug McHoney is PwC's Global International Tax Services Leader, helping clients worldwide understand a wide range of global and local tax policy developments and providing technology-enabled consulting services. Doug also hosts the Cross-border Tax Talks podcast series, providing listeners with the latest trends in taxation.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.