EMEA Dbriefs - Pillar Two – Unexpected Pillar Two liabilities in M&A transactions

As Pillar Two appears in increasing numbers of M&A transactions, it is essential to understand and seek protection against Pillar Two Top-up Tax liabilities which can arise. The calculation of Top-up Tax under Pillar Two contains underlying features which are not always well understood. In particular, the difference between Top-up Tax calculated for jurisdiction is often different to Top-up Tax calculated for individual entities in that jurisdiction. This can lead to unexpected liabilities for all parties. We’ll discuss:

• Key features of how Top-up Tax is calculated on a jurisdictional basis and a stand-alone basis

• Why this can lead to unexpected Top-up Tax liabilities

• Scenarios where this can arise in practice

• How to protect oneself against unexpected liabilities

Understand how you can plan ahead for your business.