Pillar Two readiness: What finance, accounting and tax teams must Execute

The Clock is Ticking, Are You Ready?

The OECD Inclusive Framework’s Pillar Two rules are no longer a distant prospect—they are here. Since 2024, over 60 countries have begun implementing these rules, with significant updates released in January 2026 as part of the Side-by-side package (guidance on simplified compliance for certain jurisdictions). Multinational enterprise groups (MNEs) with consolidated revenues exceeding €750 million now face immediate compliance requirements.

The stakes are particularly high for Global and Belgian MNEs. The first GloBE Information Return (GIR) filing deadline is June 30, 2026, just months away for calendar year taxpayers. Local filing requirements such as Pillar Two registrations and Qualified Domestic Minimum Top-Up Tax (QDMTT) returns are due even earlier in certain countries. For tax and finance leaders, the question is no longer whether Pillar Two will impact your business, but whether you are prepared to manage it effectively.

Understanding the Compliance Framework

Pillar Two establishes a global minimum tax rate of 15% on profits earned by large MNEs in every jurisdiction where they operate. Unlike traditional controlled foreign corporation (CFC) rules that target specific income types, Pillar Two applies to all income generated, creating a third layer of tax calculations.

The framework operates through three key mechanisms:

• Qualified Domestic Minimum Top-Up Tax: Allows countries to impose top-up taxes on local profits below 15%.
• Income Inclusion Rule: Enables parent countries to apply top-up tax on income from low-tax jurisdictions of the subsidiaries ( on a jurisdictional basis).
• Undertaxed Profits Rule: Acts as a backstop where other rules don’t fully apply.

Belgium’s Implementation: Belgium has implemented QDMTT provisions and compliance deadline of June 30, 2026 for accounting year ending December 31, 2024. These compliance requirements come with strict documentation standards and penalty provisions for non-compliance.

Operational Challenges & Implementation Roadmap

Data Complexity and Cross-Functional Collaboration

The GIR requires over 200+ data points spanning group, country, and entity levels. Key challenges include:

• Deferred tax granularity: Tracking deferred tax expense by specific assets and adjustments (not consolidated figures).
• Purchase accounting: Identifying acquisition-related tax impacts.
• System fragmentation: Aggregating data from multiple finance and tax systems.

These challenges require close collaboration between tax, accounting, treasury, IT, and legal teams.

Critical Milestones for Leadership Oversight

Data Readiness Assessment: Conduct a comprehensive review of all required Pillar Two data points. Identify gaps in deferred tax tracking, purchase accounting adjustments, and entity-level data. Evaluate current system capabilities and engage IT teams early to plan for system integration and automation.

Transitional Safe Harbor Eligibility Check: Analyze each jurisdiction’s operations to determine whether transitional safe harbor provisions apply which are designed to be a temporary compliance simplification measure. This involves reviewing country-by-country reporting (CbCR) data quality, assessing effective tax rates, and confirming compliance with safe harbor criteria. Verify that existing CbCR reports meet OECD “qualified” standards (timely filing, accuracy, completeness).

GIR and QDMTT Calculations & Filing: Oversee the end-to-end process of calculating, validating, and filing Pillar Two top-up tax liabilities. This requires validating data inputs and reconciling deferred tax and purchase accounting adjustments, ensuring consistency with financial statements, and implementing robust review and approval workflows. It also involves ensuring timely and accurate filing with relevant tax authorities, including Belgium-specific requirements, establishing clear internal deadlines and escalation procedures, and preparing for the payment of top-up tax liabilities while integrating these into cash flow forecasts.

Year End accounting and planning for Compliance: The year-end accounting and group financial statements form the basis for Pillar Two compliance calculations. It is important to consider the year-end closing and reporting process to identify key areas of focus related to Pillar Two. This exercise provides a valuable opportunity to model various Pillar Two features and analyze potential areas for intervention, enabling proactive adjustments to business operations, transfer pricing,  or planning strategies to mitigate adverse effects or forecast Pillar Two and tax outcomes.

Resource Strategy: Build, Buy, or Partner?

Tax and finance leaders must choose among three main approaches to Pillar Two compliance:

• Build: Develop in-house capabilities to maintain greater control, though this requires significant upfront effort. For example, building XML conversion tools may be necessary to file the QDMTT and GIR forms in the formats required by tax authorities. Notably, the Belgian tax authorities have indicated they do not plan to provide conversion tools for GIR filings.
• Buy/Co-source: Combine internal control with external expertise to balance cost and oversight. This approach allows organizations to leverage specialist knowledge while retaining core compliance functions internally.
• Outsource: Delegate the entire compliance process to external providers to reduce internal resource strain. However, this requires oversight from the organization to ensure access to the required data.

Regardless of the chosen approach, Pillar Two compliance demands sustained, cross-functional collaboration across tax, accounting, finance, legal, and IT teams. Early planning is critical to avoid last-minute pressures and ensure smooth execution.

Strategic Implications for Tax and Finance Leaders

Governance & Organizational Readiness

Pillar Two is a cross-functional challenge requiring strong leadership to establish a steering committee with clear ownership across functions, define data governance policies, integrate compliance into financial close calendars, and prepare for audit scrutiny with robust documentation and controls.

Financial Reporting & Provisioning

From 2024 onward, Pillar Two impacts must be reflected in financial statements, not just disclosures. Tax and finance teams should develop tax reporting tools capturing Pillar Two exposure, maintain safe harbor documentation, and coordinate closely with auditors. Interim reporting adds complexity, requiring preliminary calculations and reconciliation.

Cash Flow Management

Pillar Two changes tax planning dynamics by setting a 15% minimum tax floor. Cash flow forecasts should incorporate potential top-up tax liabilities.

Risk Management & Penalty Exposure

In Belgium and most adopting countries, the penalty regime includes fines for late filing, inaccuracies, and insufficient documentation. Mitigation requires proper safe harbor assessments, early engagement with tax authorities on uncertain positions, and rigorous documentation and validation.

Are You Ready? Five Strategic Questions

• Do you have visibility into all required Pillar Two data points, including deferred tax and purchase accounting details?
• Have you assessed transitional safe harbor eligibility and its implications?
• Is there strong cross-functional governance and resource commitment?
• Have you integrated Pillar Two milestones into your financial close calendar with realistic timelines?
• Are you prepared for Belgium’s Pillar Two specific filings and filing in other Pillar Two implementing countries?

The Time to Act is Now

Pillar Two compliance is not just a tax issue, it is a strategic, cross-functional imperative demanding leadership from tax and finance teams. The complexity is real, but so is the opportunity to build resilient processes that support compliance and strategic tax management.

If you’d like to discuss your Pillar Two readiness or need support with compliance, we are happy to assist.