Pillar Two Readiness: What’s your data strategy? – PwC
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Aug 14, 2023
Nolan Ogden
US Tax Technology Leader, PwC US
Email
Doug McHoney
International Tax Services Global Leader, PwC US
Email
The Pillar Two countdown is on, and the sweeping rules will take effect January 1, 2024. It will be the first global tax system of its kind, and the obligations will further complicate the existing global reporting and compliance environment — placing additional demands on tax departments that are already stretched thin.
The new global minimum tax framework contains significant operational, data, system, process and computational complexities. And the magnitude and timing of these changes leave little time to develop a comprehensive data strategy for complying with global and jurisdictional requirements.
So, how can you get #PillarTwoReady?
To help you integrate Pillar Two requirements with your ongoing compliance obligations, we pulled together a few questions. Read on to jumpstart or enhance your preparation.
You need data at the ready in order to keep pace and comply. Pillar Two’s tax changes could significantly impact your financial operating model, putting data and systems at the center of your operational strategy. You need to assess your current systems, data structure and sources to determine how to collect the information that Pillar Two calculations require.
Based on what we’ve seen, up to 60 percent of your data may come from your Enterprise Resource Planning (ERP) or financial consolidation systems and the rest from your sub-ledger, tax provision, employee benefits and other systems.
Our Pillar Two Guide for US Multinational Enterprises contains a detailed action plan with a step-by-step approach to preparing for Pillar Two and guidance on building a comprehensive data strategy. Knowing your options for managing your Pillar Two data strategy upfront can help you determine the technology, approach and sourcing models that best fit your needs.
It’s not an either-or proposition, but both-and. The ideal approach? Use technology to enhance your data and processes to align your Pillar Two operating model and compliance obligations. We recommend the following connected approach:
Scrutinize your current processes to help ascertain any changes you’ll need to make in order to execute and sustain global compliance. For example, evaluate whether you can adapt your existing processes and controls or if you need to make significant changes. Remember that Pillar Two will ultimately require varying compliance requirements at the global and statutory level; we anticipate deviations in how individual countries adopt legislation, which will make compliance complex.
Essentially, Pillar Two requires keeping a new set of books and implementing the tech-enabled processes to maintain them. It’s also an opportunity for the tax function to modernize operations and drive value across the business.
Access to Pillar Two-ready data can help tax leaders:
Prioritize a data strategy rooted in systems and processes to help you achieve a connected approach that fits your organization best. Know that achieving data excellence and implementing scalable solutions is not a one-time event. You’ll need to continually reassess where you are and where you want to be.
Learn more about how these new global rules could affect your business — and please feel free to contact us directly if you have questions.
© 2017 – 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
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Aug 14, 2023
Nolan Ogden
US Tax Technology Leader, PwC US
Doug McHoney
International Tax Services Global Leader, PwC US
The Pillar Two countdown is on, and the sweeping rules will take effect January 1, 2024. It will be the first global tax system of its kind, and the obligations will further complicate the existing global reporting and compliance environment — placing additional demands on tax departments that are already stretched thin.
The new global minimum tax framework contains significant operational, data, system, process and computational complexities. And the magnitude and timing of these changes leave little time to develop a comprehensive data strategy for complying with global and jurisdictional requirements.
So, how can you get #PillarTwoReady?
To help you integrate Pillar Two requirements with your ongoing compliance obligations, we pulled together a few questions. Read on to jumpstart or enhance your preparation.
You need data at the ready in order to keep pace and comply. Pillar Two’s tax changes could significantly impact your financial operating model, putting data and systems at the center of your operational strategy. You need to assess your current systems, data structure and sources to determine how to collect the information that Pillar Two calculations require.
Based on what we’ve seen, up to 60 percent of your data may come from your Enterprise Resource Planning (ERP) or financial consolidation systems and the rest from your sub-ledger, tax provision, employee benefits and other systems.
Our Pillar Two Guide for US Multinational Enterprises contains a detailed action plan with a step-by-step approach to preparing for Pillar Two and guidance on building a comprehensive data strategy. Knowing your options for managing your Pillar Two data strategy upfront can help you determine the technology, approach and sourcing models that best fit your needs.
It’s not an either-or proposition, but both-and. The ideal approach? Use technology to enhance your data and processes to align your Pillar Two operating model and compliance obligations. We recommend the following connected approach:
Scrutinize your current processes to help ascertain any changes you’ll need to make in order to execute and sustain global compliance. For example, evaluate whether you can adapt your existing processes and controls or if you need to make significant changes. Remember that Pillar Two will ultimately require varying compliance requirements at the global and statutory level; we anticipate deviations in how individual countries adopt legislation, which will make compliance complex.
Essentially, Pillar Two requires keeping a new set of books and implementing the tech-enabled processes to maintain them. It’s also an opportunity for the tax function to modernize operations and drive value across the business.
Access to Pillar Two-ready data can help tax leaders:
Prioritize a data strategy rooted in systems and processes to help you achieve a connected approach that fits your organization best. Know that achieving data excellence and implementing scalable solutions is not a one-time event. You’ll need to continually reassess where you are and where you want to be.
Learn more about how these new global rules could affect your business — and please feel free to contact us directly if you have questions.
© 2017 – 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
