Delivering a Successful Pillar 2 Project: Best Practices and Lessons Learned

As part of the BEPS (Base Erosion and Profit Shifting) project, the OECD and the G20 addressed the complex issue of international tax optimisation strategies. The GloBE (Global Anti-Base Erosion) rules resulting from this work aim to ensure that large multinational enterprises pay a minimum level of tax on the income generated in each country in which they operate.

The operational transposition of these rules into domestic legislation — through the Pillar 2 framework — gives effect to the principle of a global minimum tax of 15% on multinational profits. In France, the implementation of the Pillar 2 Directive has led to the introduction of a Domestic Top-Up Tax (DTT), based on two mechanisms: the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR).

The DTT applies to all groups with consolidated annual revenues of at least €750 million, as from financial year 2024. Companies then have 15 months (18 months for the first filing) to submit the GloBE Information Return (GIR), which forms the basis for calculating the DTT. This means a filing deadline of 30 June 2026 for entities whose 2024 financial year ended on 31 December 2024 (and slightly later for those with a non-calendar financial year).

Two Experts of Pillar 2: Wolters Kluwer and VISEO

Against this backdrop, Pillar Two projects are multiplying across organisations. To structure this process, VISEO recommends the CCH Tagetik solution from Wolters Kluwer, a global player renowned for its expertise in taxation and compliance.

As an international digital services company, VISEO supports numerous groups in implementing this solution and was recognised in 2024 as Top New Worldwide Partner by CCH Tagetik. VISEO assists its clients with the deployment of the Global Minimum Tax (GMT) and CBCR modules, and also provides ongoing support and maintenance for Pillar 2 solutions, with expertise covering both technical and business aspects.

One of the key strengths of the CCH Tagetik offering is its Pillar 2 pre-configuration, specifically designed to support the collection and processing of the financial data required for the GloBE tax return (GIR). This acts as an accelerator for Pillar 2 projects, with deployment timelines ranging from 4 to 8 months.

The CCH Tagetik solution offers several key advantages:

• The ability to create customised rules, data entry forms and reports
• A collaborative environment that facilitates data collection and submission
• The capability to run simulations and estimations directly within the solution
• Full traceability of all operations performed
• Quarterly updates to keep pace with regulatory developments

Best Practices for a Pillar 2 Project

Two key challenges must be addressed as part of a Pillar 2 project:

• The ability to connect the new solution to the company’s information system in order to retrieve the required data, as well as to source third-party data not directly available in the consolidation tool
• The ability to mobilise both tax teams (often less familiar with large-scale IT projects) and consolidation teams

In addition to VISEO’s teams, it is recommended to involve a tax advisor who can support the project team during testing phases and provide guidance on data entry points (including mapping between consolidation accounts and the CCH Tagetik solution).

The first step of the project is to define the scope of legal entities to which the Pillar 2 Directive will apply. Some large groups consist of several thousand legal entities (nearly 2,300 for one of VISEO’s clients), sometimes with complex ownership structures (joint ventures, non-consolidated entities, branches, etc.) across more than 200 jurisdictions. It is recommended to start with a pilot scope to validate the overall functioning of the solution before rolling it out across the entire group.

The second step is to identify users and define their respective roles. For a group with more than 2,000 entities, it is not necessarily efficient to involve 2,000 users in the solution. Identifying users who can manage multiple entities helps reduce the number of stakeholders and facilitates deployment and training. In many cases, one user per country or jurisdiction is sufficient. This is also an opportunity to set up a tax steering committee to arbitrate complex cases, thereby speeding up decision-making throughout the project.

One of the strengths of the CCH Tagetik Global Minimum Tax pre-configuration is its catalogue of data points aligned with the GloBE rules. From a catalogue of 250 data points, companies select those required to address their specific circumstances and then perform the necessary mapping with consolidation data or other data sources. There is no need to automate all interfaces from the outset. Start with the data required to cover one or more target jurisdictions as part of a pilot, validate the calculated data and take the time to stabilise the Pillar 2 module before extending it to the entire group.

Finally, user support and change management should not be overlooked. This is particularly important given that tax departments are not always accustomed to financial reporting activities. Workshops held throughout the project, with strong interaction between VISEO teams and the client’s project team, will facilitate user adoption and ensure effective use of the CCH Tagetik solution. Lastly, it is strongly recommended to take advantage of the deployment of the CCH Tagetik Pillar 2 module to activate the CBCR module, allowing consolidated data from mandatory country-by-country reporting to be integrated, some of which will feed directly into the GloBE calculation.