New insights from the latest Wolters Kluwer BEPS Pillar Two Readiness Index reveal an accelerated global adoption of the BEPS Pillar Two initiative, despite some continued challenges.
Wolters Kluwer Tax & Accounting (TAA) Asia Pacific (APAC) today revealed that data from the BEPS Pillar Two Readiness Index Report Q1 2024 highlights encouraging trends in compliance. The BEPS Pillar Two Readiness Index serves as a barometer to assess readiness among global tax jurisdictions subject to BEPS Pillar Two measures.
The Index reveals that over 70% of organizations indicated that they have begun preparations to comply while 58% are transitioning into the middle-to-late stages of preparedness. Additionally, confidence in international collaboration has improved substantially, with 60% now saying it is achievable, up from 45% quarter-on-quarter. “There is a critical need for multinational companies to meet and manage the complex global requirements related to BEPS Pillar Two, and we are encouraged by the progress that organizations are continuing to make in their compliance efforts,” said Andy Hung, Director of Product Management, Wolters Kluwer TAA APAC. “Wolters Kluwer remains committed to supporting our clients as they look to standardize processes and drive more efficient data collection processes.” Additional insights from the latest BEPS Pillar Two Readiness Index Report reveal:
- Recognized Benefits: A strong 74% of organizations are already recognizing the positive effects of the initiative, including streamlined processes and increased standardization across varying jurisdictions.
- Adoption of Tax Technology: Technology appears to be a core facet of how many entities will look to address those obstacles, with a majority of respondents (61%) prioritizing the centralization and consolidation of various tax processes via a single platform. Meanwhile, 58% are focused on increasing automation processes. 34% of organizations overall are actively considering the implementation of tax technology solutions to streamline their tax obligations.
- Anticipated Challenges: Despite the positive reception, 70% of respondents foresee potential concerns or challenges related to international collaboration.
- Hurdles to Implementation: Key challenges also include legislative uncertainty, understanding data requirements, and access to limited resources.
Wolters Kluwer's mission is to empower customers with the information, software solutions, and services they need to make critical decisions, achieve successful outcomes, and save time. The company currently offers solutions developed to aid customers to prepare and comply with BEPS Pillar Two requirements. Wolters Kluwer is committed to enabling customers to enhance the way they do business and solve complex problems with a range of digital solutions and services, which continuously evolves to meet the market’s changing needs.
Wolters Kluwer CCH Integrator BEPS Pillar Two solution was designed specifically to assist multinational corporate tax departments as they seek to simplify and streamline reporting obligations. The solution provides users with a complete corporate tax performance management platform that will guide them through the entire data capture, calculation, and reporting requirements of Pillar Two. This is in addition to the company’s CCH Tagetik Global Minimum Tax solution, which was designed for multinational corporate CFOs.
Over 145 countries and jurisdictions are collaborating on the implementation of 15 measures to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment under the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework on Base Erosion Profit Shifting (BEPS). The framework presents a global minimum Effective Tax Rate subjecting multinational enterprises with consolidated global revenue over €750M to an effective tax rate of 15% from 2024 onward.
For more information, access the full BEPS Pillar Two Readiness Index Report Q1 2024 from our website here.
