Simplifying Pillar Two compliance with advanced tax technology
Highlights
- Pillar Two compliance requires automated data collection and standardized validation processes.
- Advanced technology solutions streamline reporting workflows and enable real-time impact assessment.
- Strategic investment in tax technology helps teams maintain compliance and operational efficiency.
The global tax landscape is undergoing a significant transformation with Pillar Two, presenting substantial challenges for corporate tax professionals. With 43% of corporate tax professionals rating Pillar Two (Global Minimum Tax, BEPS 2.0) as extremely or very challenging for their departments, navigating these new international tax rules demands more than just diligence; it requires sophisticated technology.
This article explores the complexities Pillar Two introduces and how technology solutions, particularly Orbitax Global Minimum Tax (GMT) and ONESOURCE Tax Provision, can empower tax teams to manage these effectively.
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Pillar Two’s key hurdles for tax professionals
Leveraging ONESOURCE Tax Provision and Orbitax GMT technology to navigate Pillar Two
Strategic steps for effective Pillar Two data management
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Pillar Two’s key hurdles for tax professionals
The implementation of Pillar Two brings forth several considerable challenges:
Heightened complexity and compliance demands: Pillar Two’s new rules significantly escalate the complexity of tax compliance. Professionals must decipher intricate local tax laws and their interplay with overarching Pillar Two regulations, which vary considerably across jurisdictions.
Vast data requirements: The sheer volume and granularity of data needed for Pillar Two compliance are unprecedented. With 58% of tax departments reporting they are under-resourced, collecting and managing extensive financial and tax data accurately becomes a monumental task, increasing the risk of errors.
Dynamic regulatory landscape: The tax environment is in constant flux, with frequent updates to Pillar Two rules and interpretive guidance. Tax departments are spending more than half their time on reactive work, mostly around compliance, when they would prefer to spend about two-thirds of their work time on strategic and proactive analysis. Continuous monitoring and swift adaptation are crucial for maintaining compliance.
Strain on tax provision processes: The added layers of complexity and data necessitate more time and resources for completing tax provisions. This can delay financial reporting and elevate audit risks.
ONESOURCE Tax Provision software
Automate your corporate financial close and save time during the tax provision process
Click here ↗Leveraging ONESOURCE Tax Provision and Orbitax GMT technology to navigate Pillar Two
To confront these hurdles, corporate tax professionals are increasingly relying on advanced technology. According to the 2025 State of Corporate Tax Department Report, 51% of tax departments are actively introducing technology and automation into their workflows, with 57% of those implementing new technologies including GenAI capabilities.
Orbitax GMT and ONESOURCE Tax Provision are designed to provide robust support in this new era. These platforms offer a suite of capabilities crucial for managing Pillar Two’s demands:
Automated data collection and validation
Both Orbitax GMT and ONESOURCE Tax Provision integrate seamlessly with diverse financial and tax systems. This automation pulls data from general ledgers and financial statements, drastically reducing manual entry, minimizing errors, and ensuring data consistency. Built-in validation tools meticulously check data for completeness, accuracy, and consistency, flagging discrepancies for immediate review. This capability directly addresses the challenge of managing Pillar Two’s extensive data requirements.
Accurate and consistent calculations
A core strength of these solutions is their embedded regulatory knowledge. Orbitax GMT incorporates the latest OECD model rules and local legislation for Pillar Two, while ONESOURCE Tax Provision contains up-to-date general tax laws and regulations. This ensures that all calculations, from determining the effective tax rate (ETR) and applying top-up tax rules under Pillar Two (Orbitax), to calculating deferred tax, current tax, and overall tax provisions (Tax Provision) are performed with precision, consistency, and adherence to the latest standards.
Streamlined reporting and compliance management
The platforms significantly simplify the reporting process. Orbitax GMT facilitates the preparation and submission of Pillar Two-specific filings, such as the Global Information Return (GIR) and local top-up tax returns, often using pre-populated templates. Similarly, ONESOURCE Tax Provision aids in preparing broader tax returns and financial statement disclosures. Both solutions feature workflow management tools to track tasks, deadlines, and approvals, ensuring timely completion of all compliance steps.
Enhanced analytics and scenario planning
Understanding the financial impact of Pillar Two is vital. Only 26% of respondents from under-resourced tax departments say it is very likely that they could provide timely and accurate forecasting for the business. Both Orbitax GMT and ONESOURCE Tax Provision offer advanced analytics and scenario planning. Tax professionals can conduct impact analyses to see how Pillar Two affects the group’s overall tax position (Orbitax) or how various tax changes influence the company’s financial standing (Tax Provision). The ability to run “what-if” scenarios helps in assessing different tax strategies and regulatory shifts, supporting informed strategic decision-making.
Continuous updates and expert support
Given the dynamic nature of tax regulations, ONESOURCE and Orbitax platforms include update services that automatically incorporate the latest regulatory changes and tax laws. This eases the burden on tax teams to manually track and implement these updates. Furthermore, Thomson Reuters provides comprehensive customer support, including training, documentation, and technical support.
Strategic steps for effective Pillar Two data management
Effectively managing Pillar Two requires a proactive and strategic approach, particularly as only 22% of corporate tax departments have reached the “proactive” stage of their technological development, while 68% remain in “chaotic” or “reactive” stages:
Assess scope and applicability: Determine if your group meets the revenue threshold for Pillar Two, guiding resource allocation and technology investment.
Understand jurisdictional nuances: Implementation timing and specific rules vary by country. Continuous tracking of local legislation is essential.
Develop a robust compliance framework: Establish clear processes for data collection, calculation, review, and reporting. Companies with adequate resources are significantly less likely to incur penalties.
Invest in technology early: Early adoption of appropriate technology can smooth the transition, reduce compliance risks, and improve accuracy.
Train and upskill staff: Ensure tax professionals are well-versed in Pillar Two rules and the technology tools used to manage them.
Monitor regulatory developments: Stay informed about ongoing changes to adapt compliance processes swiftly.
Mastering Pillar Two
Pillar Two undeniably introduces significant complexities for corporate tax professionals. However, these challenges are manageable with the right technological support. Corporate tax professionals are optimistic about technology’s potential, with 94% feeling hopeful or excited about the future of tax technology. Orbitax GMT and ONESOURCE Tax Provision offer powerful, integrated solutions that automate critical processes, ensure calculation accuracy, and streamline reporting.
By strategically investing in such technology and adopting proactive management practices, tax teams can navigate the intricacies of Pillar Two, maintain compliance, mitigate risks, and enhance their overall operational efficiency in this new global tax environment.
Orbitax Global Minimum Tax
Automating Pillar Two global minimum tax calculations with an integrated platform
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