Global tax readiness survey highlights progress, challenges, and future priorities of multinational enterprises

Wolters Kluwer, a global leader in professional information, software solutions and services, have today announced the release of its Q2 2024 BEPS Pillar Two Readiness Index Report. This comprehensive global survey gauges the preparedness of multinational enterprises (MNEs) for compliance with the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion Profit Shifting (BEPS) Pillar Two regulations, which introduce a global minimum effective tax rate of 15% for multinational enterprises with consolidated global revenue exceeding €750 million (A$1.245 billion).

Key findings:

• 88% of respondents have initiated their BEPS Pillar Two compliance journey, an 18% increase from the previous quarter, with 27% of organisations now in the final stages of implementing data and operating models.

• 76% of respondents are concerned about the complexity of data collection for BEPS Pillar Two, a 6% increase from the previous quarter.
• 93% of respondents identify “Adapting to changing legislation and local requirements” as their main challenge for global collaboration.
• 33% of respondents are actively exploring technology solutions to help meet BEPS Pillar Two requirements.

The latest survey reveals a marked increase in readiness, with 88% of organisations now actively engaged in their BEPS Pillar Two journey. Additionally, 83% have conducted preliminary impact assessment studies, aligning with their efforts to meet compliance requirements. This proactive approach reflects a substantial shift towards readiness for BEPS Pillar Two compliance.

Understanding data requirements remains the primary challenge, with a 6% increase in concerns over data gathering. Legislative uncertainty, previously the top concern, has now shifted to third place as local regulations become clearer.

Whilst there is greater clarity around legislation for some jurisdictions, the shift to “Adapting to changing legislation and local requirements” as the primary concern for global collaboration highlights the complexities of maintaining compliance across diverse regulatory landscapes.

Confidence in current tax technology and data management systems has decreased, with 0% of respondents very confident in their current systems’ capability to handle BEPS Pillar Two requirements. As a result, 33% are considering technology solutions to help tackle challenges and capitalise on BEPS Pillar Two opportunities.

Although the introduction of new global tax laws adds complexity and heightens compliance and reporting obligations, organisations are increasingly aware of the opportunities in BEPS Pillar Two tax planning, particularly in enhancing processes, leveraging data and technology, driving improvements, and strengthening risk management.

As the effective date for BEPS Pillar Two approaches, MNEs must intensify their preparation efforts. Proactive planning, strategic investments in technology, and enhanced global collaboration are essential for achieving compliance. The Wolters Kluwer BEPS Pillar Two Readiness Index Report provides vital insight for organisations to navigate the complexities of BEPS Pillar Two and leverage its opportunities effectively.

For more information, or to access the full report, visit Wolters Kluwer’s website.