Multinationals Face Complex Data Challenges From Global Tax Deal

Around the world, jurisdictions are already making significant headway toward implementing BEPS 2.0 Pillar Two. Multinationals will need to analyze their existing systems and consider whether to invest in new technology and improved processes.

Multinational enterprises are facing new and complex tax rules stemming from the Organisation for Economic Co-operation and Development (OECD) and G-20 countries’ Base Erosion and Profit Shifting (BEPS) 2.0 project—particularly the project’s Pillar Two 15% global minimum tax, which is set to apply to multinational groups with global revenue of more than €750 million ($829 million).

Enforcing these rules will require unprecedented global cooperation between tax authorities, and implementation approaches likely will vary among jurisdictions adopting the rules, making compliance a challenge and creating the risk of controversy. Multinationals also will need to manage a substantial increase in data collection and tracking required to comply with these rules.

Given the rules’ scope and complexity—and implementation as early as 2024 in many jurisdictions—multinationals need to evaluate and update their existing data strategies now.