4 minute read 17 Jan 2024
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Top 10 unexpected Pillar Two challenges for US multinationals

Jason Yen
By Jason Yen

Principal, International Tax and Transaction Services, Ernst & Young LLP

Thought leader on global tax policy changes. Experienced advisor on complex US tax rules. Outside-the-box thinker.

4 minute read 17 Jan 2024
Related topics Tax
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Multinational enterprises may find Pillar Two affects their ETR computation in surprising ways.

With more countries proposing and enacting Pillar Two legislation, multinational enterprises may be familiar with the general framework of the model rules and the extensive corresponding guidance that has been released to date. In an article first published in Tax Notes Today International, Jason Yen, a Principal in Ernst & Young LLP’s National Tax Department in Washington DC, provides a closer examination of the Pillar Two guidance, revealing unexpected issues that may come as a surprise to MNEs. Jason, with input from Ernst & Young LLP Senior Managers Adam Becker and Bona Chung, identifies 10 surprising possible outcomes of the application of the OECD’s Pillar Two initiative that the group has encountered to date. Some of these issues may stem from unintended glitches in the rules and could perhaps be easily fixed by the OECD/G-20 inclusive framework in the future. Others result from deliberate policy choices, which may be more difficult to change. All can pose challenges for US MNEs if they are left unexamined in the context of each company’s individual facts and circumstances.

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The implementation of the base erosion and profit shifting framework developed by the Organisation for Economic Co-operation and Development requires organizations to re-evaluate their business. We can help you develop the sustainable tax framework the new environment demands.

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Summary

Careful analysis of these issues sooner, rather than later, is recommended to determine whether some issues can be proactively addressed.

About this article

Jason Yen
By Jason Yen

Principal, International Tax and Transaction Services, Ernst & Young LLP

Thought leader on global tax policy changes. Experienced advisor on complex US tax rules. Outside-the-box thinker.

Related topics Tax
Upvote