BEPS 2.0

BEPS 2.0 developments: Pillar One and Pillar Two

The Organisation for Economic Cooperation and Development (OECD) is working full steam on the two-pillar solution of the Base Erosion and Profit Shifting (BEPS) 2.0 project. Multinational enterprises across industries are likely to be affected. Check out the latest developments and PwC insights to get prepared for the new tax era.

Pillar One: Reallocation of taxation rights

The consultation process demonstrated that business still has many serious concerns, including complexity and the arbitrary nature of several of the formulas, but it does seem that the OECD is taking stakeholder comments seriously. The OECD has a continuing urgency to move the project forward to its estimated completion date in mid2023, but time will tell how realistic that is. Taxpayers should continue to model the provisions and engage with government and business organisations to achieve more simplicity and manageability in the final set of rules.

OECD public consultation meeting: Amount A of Pillar One 

damil illustration

Pillar Two: Global Anti-Base Erosion (GloBE) proposal

The legal basis for the Pillar Two Draft Directive is Article 115 of the Treaty on the Functioning of the EU (TFEU) which requires the unanimous approval by all 27 Member States. In view of the very tight implementation timeline, the Commission has decided not to undertake a public consultation, but instead referred to the consultations held at the OECD level. If adopted, Member States should bring into force the laws, regulations and administrative provisions necessary to implement the provisions as provided in the directive by 31 December 2022, and to apply the related implementing provisions of the IIR and the UTPR starting from 1 January 2023 and 1 January 2024 respectively.

Considering this tight timeline, the key actions for groups falling within the scope of the minimum taxation rules are:

  • Assess the impact on your organisation and prepare resources for the additional compliance related to the minimum taxation rules;
  • Communicate the effects to your stakeholders;
  • Train your teams to be able to operate under the new rules as from 1 January 2023.

Pillar 2: EU Member States give final approval

Pillar 2: European Commission’s Directive proposal

Response to the OECD on the Pillar 2 consultation


Contact us

Begga Sigurdardottir

Tax Partner, PwC Luxembourg

Tel: +352 49 48 48 3194

Wim Piot

Tax Partner, PwC Luxembourg

Tel: +352 49 48 48 2568

Philippe Ghekiere

Tax Director, Pillar 2 Specialist, PwC Luxembourg

Tel: +352 621 333 228

Christophe Hillion

Tax Partner, Transfer Pricing, PwC Luxembourg

Tel: +352 49 48 48 2031

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