Pillar Two FAQs

By Joe Sothcott, Young Jin Kim & Annamaria Maclean

With the Pillar Two rules now in force in New Zealand and as we edge closer to the first registration deadlines, we take a look at the common queries and questions we have received about how the Pillar Two rules work in New Zealand (Note: answers are accurate as at April 2026).

Have the Pillar Two rules been enacted in New Zealand?

Yes - the New Zealand Government enacted legislation to formally implement the OECD Global Anti-Base Erosion (GloBE) Pillar Two rules in March 2024. The new Pillar Two rules will apply to multinational enterprise groups (MNE groups) with global turnover above EUR750m in two of the four preceding income years.

In addition to the 20 to 25 New Zealand-headquartered groups on Inland Revenue’s radar, the Pillar Two rules will apply to inbound groups operating in New Zealand (e.g., via a subsidiary, branch or permanent establishment) where that group meet the global turnover threshold of EUR750m.

The GloBE rules, as enacted in New Zealand, include:

• The Income Inclusion Rule (IIR) and Under Taxed Profits Rule (UTPR) that will apply to both New Zealand-headquartered groups and inbound groups for income years beginning on or after 1 January 2025.
• The Domestic Income Inclusion Rule (DIIR) will apply for income years beginning on or after 1 January 2026.
  

The Qualified Domestic Minimum Top-up Tax (QDMTT) has not been enacted in New Zealand.

Please refer to our previous Tax Alert articles on Pillar Two for an overview of the GloBE rules and our comments on the recommended next steps that groups should take to understand their exposure to these rules. Information about the OECD Pillar Two side-by-side package can also be found here.

New Zealand registration requirements

New Zealand constituent entities are required to register in New Zealand six months after the end of the first fiscal year they are in scope of the GloBE rules. For example, for an entity with a fiscal year end of 31 December, the registration due date is 30 June 2026 (being six months after the end of the first year the rules apply – 1 January 2025). This also means 30 June 2026 is likely the earliest possible registration deadline (unless a taxpayer has an unusual transitional/part year). This applies to both New Zealand headquartered MNEs and groups with a subsidiary, branch or permanent establishment in New Zealand. Failure to register could result in a penalty of up to NZD100,000.

Groups operating in New Zealand can register now via a new international exchange of information account in myIR. Required registration details include:

• The name and IRD number of the New Zealand constituent entity lodging the registration;
• The name, jurisdiction of tax residence and Tax Identification Number (TIN) of the ultimate parent entity;
• Names and IRD numbers of all New Zealand constituent entities in the MNE group;
• Name of entity that will file the GloBE Information Return (GIR), their TIN, and where it will file the GIR. This will satisfy the GIR notification requirement on behalf of all New Zealand constituent entities in the Group;
• Start and end dates of the ultimate parent entity’s fiscal year;
• Whether any New Zealand-owned constituent entities of the MNE group are intermediate parent entities or partially owned parent entities (specifying which);
• Contact details of New Zealand constituent entity applying; and
• Tax agent details.
  

The notification made during registration will remain current until changes are made (i.e. a standing / continuous notification). If changes to the notification are required, this will be done in the international exchange of information account.

Inland Revenue has confirmed only a single registration for each MNE Group with constituent entities in New Zealand will be required, with a designated New Zealand constituent entity registering and completing the notification and report on behalf of the other New Zealand constituent entities. Inland Revenue has said that where the MNE Group is New Zealand headquartered, the Ultimate Parent Entity should register.

Inland Revenue has also confirmed that a tax agent may complete the registration and filing, even if they are not linked to the taxpayer’s other accounts. The tax agent for the GloBE account can differ from agents associated with other accounts.

Annual Multinational top-up tax return

The New Zealand Annual Multinational top-up tax return (MTTR) must be filed within 16 months of the last day of the relevant fiscal year or 20 months for the first year of application. For example, if a New Zealand constituent entity has a 31 December balance date and is first subject to the GloBE rules in the 2025 fiscal year, their first MTTR will be due on 31 August 2027 (20 months after 31 December 2025). Their second MTTR will be due on 30 April 2028 (16 months after 31 December 2026). Payment of any multinational top-up tax would also be due on the same day the MTTR is due to be filed with Inland Revenue.

Inland Revenue has recently confirmed that a nominated New Zealand constituent entity may file a single MTTR on behalf of all New Zealand entities within the same MNE group.

While the MTTR requirements are still under consideration, Inland Revenue’s indicative proposal for the MTTR would require the following information:

• Constituent entity name (and related IRD number) filing on behalf of the group
• Ultimate parent entity name
• Amount of top-up tax payable (as per GloBE Information Return)
• Schedule of constituent entities (and related IRD numbers) covered in the return.
  

This streamlined approach reflects that all necessary calculations under the IIR (including DIIR) and UTPR will be included in the GloBE Information Return and will not be required to be replicated in the MTTR.

For completeness, we note that under current legislation, a New Zealand constituent entity is required to file an MTTR, even if no top-up tax is payable. However, Inland Revenue is considering a remedial law change that would remove the filing requirement where no top-up tax liability exists. They are also reviewing how the time bar would apply in such cases.

GloBE Information Return

The GloBE Information Return (GIR) must be filed in New Zealand within 15 months from the last day of the relevant fiscal year. This is extended to 18 months for the first year of application. For example, if a New Zealand constituent entity has a December balance date and is first subject to the GloBE rules in the 2025 fiscal year, their first GIR will be due on 30 June 2027 (18 months after 31 December 2025). Their second GIR will be due on 31 March 2028 (15 months after 31 December 2026).

Care will need to be taken on the timing if the multinational group is subject to the GloBE rules in another country in an earlier year. Inland Revenue recommends that New Zealand MNEs file the GIR within 15 months of their first fiscal year end, even though the NZ Pillar Two rules allows the GIR to be filed 18 months after the end of the first fiscal year. This is to align with other jurisdictions that may already be in their second year of application, where the transitional year extension is no longer available.

The GIR does not need to be filed in New Zealand where it is filed on time by the Ultimate Parent Entity or Designated Filing Entity located in a jurisdiction that has a Qualifying Competent Authority Agreement with New Zealand. A Qualifying Competent Authority Agreement is a bilateral or multilateral agreement between Competent Authorities that allows for automatic exchange of information. This limits the compliance burden on MNE Groups by limiting the number of jurisdictions where the GIR is required to be filed. However, Inland Revenue have noted that foreign-headquartered MNE groups proposing to file the GIR in another jurisdiction must notify Inland Revenue during the registration process, and that any future change in filing the GIR requires an update via myIR. As noted above, Inland Revenue plans to implement a standing notification system, where only changes need to be reported after the initial notification at registration.

The above exception does not apply to New Zealand headquartered MNE groups and Inland Revenue requires the GIR to be filed in New Zealand for income years beginning on or after 1 January 2025.

GIRs that are filed in New Zealand will follow the standard template that has been developed by the OECD.

Does New Zealand have a Qualified Domestic Minimum Top-up Tax?

New Zealand has not implemented a QDMTT for foreign-owned subsidiaries operating in New Zealand.

However, New Zealand has implemented a DIIR with effect from 1 January 2026. New Zealand’s DIIR functions like a QDMTT but only applies to New Zealand headquartered groups. The DIIR means New Zealand-headquartered groups do not have to pay any top-up tax on undertaxed New Zealand income (if there were any) to other countries under the UTPR.

If you have any questions, please contact your usual Deloitte advisor.