Navigating Mergers and Acquisitions in the Era of the OECD Pillar Two Model Rules

Tax positions have always been a part of merger and acquisition (M&A) transactions, but the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two Model Rules (Pillar Two) introduce a new layer of considerations. The impact on a target’s effective tax rate can affect the after-tax return on the investment, impacting the valuation of transactions. It is clear, therefore, that these rules will have wide-reaching implications for M&A, reshaping strategies, and decision-making processes for companies and investors alike.

Our article delves into the key tax implications of the Pillar Two Model Rules on M&A transactions, providing actionable insights and practical solutions to help MNEs manage these complexities effectively.  

Key Aspects Covered:

• Pillar Two Charging Mechanisms
• Valuations and Modelling
• Tax Due Diligence
  
• Tax Structuring
• Contractual Protections
• Financing Considerations
• Integration and Post-Acquisition
• Strategic Responses