OECD Pillar Two is the OECD/G20 framework imposing a 15% global minimum effective tax rate on large multinational groups via the GloBE rules.
Pillar Two is the second leg of the OECD/G20 Two-Pillar Solution. It introduces the Global Anti-Base Erosion (GloBE) rules, which ensure that multinational enterprises (MNEs) with consolidated revenue above EUR 750m pay an effective tax rate of at least 15% in every jurisdiction where they operate.
Where the local ETR falls below 15%, a top-up tax is collected, primarily by the parent jurisdiction (Income Inclusion Rule, IIR) or the source jurisdiction (Undertaxed Profits Rule, UTPR).
The GloBE ETR is computed jurisdiction by jurisdiction using a defined GloBE income base (broadly accounting profit with adjustments) and covered taxes. A Qualified Domestic Minimum Top-up Tax (QDMTT) lets the source country collect the top-up itself before the parent country can. Many jurisdictions have legislated Pillar Two from 2024 onward, including the EU, UK, Japan, South Korea, Switzerland, and Singapore.
Pillar Two reduces the value of low-tax holding regimes (Ireland's 12.5% rate, certain Swiss cantons, Hungary's 9% CIT) for in-scope groups. Tax incentives now need to be designed as Qualified Refundable Tax Credits (QRTCs) to remain effective.
You will encounter Pillar Two if your group is part of an MNE with consolidated revenue above EUR 750m, when assessing the ETR in low-tax jurisdictions, when redesigning tax incentives to remain GloBE-compatible, and during financial reporting where deferred-tax balances must reflect Pillar Two top-up exposure.
See what a company actually costs in year one, and how the jurisdictions compare on tax, capital and timeline.
