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The evolving landscape of global tax regulations, exemplified by initiatives such as BEPS (Base Erosion and Profit Shifting) Pillar II, brings heightened complexity and scrutiny to organisations worldwide. This article identifies the challenges intrinsic to implementing BEPS Pillar II and proposes a comprehensive approach to tackle them. Our point of view includes the perspective of both MNEs with Swiss HQs and local entities with HQs outside Switzerland.
BEPS Pillar II marks a significant evolution in international tax regulations, aiming to ensure that multinational enterprises fulfil their tax obligations and curb profit shifting to low-tax jurisdictions. However, implementing Pillar II presents a multitude of challenges – not only the legislation itself, but across technology, processes, data and organisational domains.
Challenges in BEPS Pillar II implementation
| Area | What do we mean? | Examples |
| Data complexity | The data required for BEPS 2.0 spans financial, tax, HR, corporate and other critical dimensions. Whilst on the surface, many data points appear to reside within consolidation systems, this is often not the case in reality. |
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| Technology & architecture | Assessing existing and new technology for BEPS Pillar II is paramount | Implementing tools to automate calculation and reporting would improve quality, minimise compliance challenges and optimise business as usual costs. |
| Operating model | Establishing robust processes and governance is essential | Define clear responsibilities of the group vs the local entity. Define and communicate early timelines and submissions, and the group approach, e.g. who is the owner of the QDMTT? |
| Data strategy | Developing an end-to-end data strategy is crucial. | Are decisionmakers aware of what and where the required information is already available among financial data, tax data and HR data? What is the process to align this information for Pillar 2 purposes? |
| People & organisation | Ensuring cross-functional stakeholder involvement is pivotal | Tax is the requestor of information from finance and HR. However, the likelihood is that the data is not readily available within finance, which could result in significant additional effort and frustration. Upfront collaboration and expectation management are essential.  |
Simplifying the BEPS Pillar II framework
The right solution
PwC offers comprehensive support throughout the BEPS Pillar II implementation journey, considering factors such as short-term versus long-term solutions, integration with existing architecture, scalability and maintenance requirements. From transitioning from Excel-based systems to fully integrated solutions within platforms, the emphasis is on building a future-proof tax ecosystem aligned with finance transformation goals.
| Â | Excel-based (Light) Enabling preparation of GloBE Information Returns |
Technology supported |
System integrated |
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BEPS Pillar II and finance transformation
Integrating BEPS Pillar II into broader finance transformation initiatives presents opportunities for automation, compliance improvement and reduced manual efforts. By considering a holistic end-to-end solution to BEPS Pillar 2 requirements, organisations can leverage the benefits of finance transformation while ensuring compliance with evolving tax regulations.
The following aspects also need to be considered in relation to the E2E process, and in particular they need to be integrated with the overall finance architecture.
| Phase | Tax analysis | Processes and procedures | Business and functional requirements | Implementation of technological solution | Go-live technology solution and post-release support |
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| Deliverable | Tax assessment | Pillar II process manual | Functional analysis | Configuring the Pillar II solution |
Technology solution in production environment |
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| Team | Tax | Tax Advisory Tranformation |
Digital Innovation
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Digital Innovation
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Digital Innovation
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Why partner with PwC?
Integrated team and multidisciplinary approach
PwC’s approach is to set up a team with the complementary skills that are necessary to successfully complete a project of this magnitude. In particular, the aim is to structure multidisciplinary teams composed of people with tax, operational/procedural and technological/digital skills. PwC can also leverage its international network.
Scalable, tailormade approach
PwC is able to adapt the project proposal and related activities based on the client’s preferences through alternative delivery options, and also to manage the transition from transitional rules to Globe Full rules. The delivery model can be developed according to the needs and complexities of the set-up phases, from an in-sourcing approach with PwC as an advisor to full outsourcing of activities, starting from the data received from the client. The role of technology proposed by PwC for the management of tax obligations therefore plays a central role.
Knowledge of the client and the industry
The team that will be involved in the project has had the opportunity to develop a deep knowledge of the client, having participated in constructing the civil and fiscal model of the country in which the company and its main foreign companies are based. Moreover, thanks to its numerous references, PwC is able to propose an approach consistent with the sector in which the client operates.
Successful track record
PwC has worked with various groups to successfully complete a number of complex tax projects (including country-by-country reporting, total tax contribution, ESG and tax control framework). It also currently has Pillar II projects ongoing.
Check our PwC Pillar Two Data Input Catalogue
This blog serves as a roadmap for organisations navigating the challenges of BEPS Pillar II, offering actionable insights and strategies for successful implementation in collaboration with PwC. Check our BEPS 2.0 website or contact us directly. We're happy to support.
Contact us
Dominik Birrer
Marco Fontana
Jochen Richner
Managing Director, Integrated Compliance & Reporting Technology Leader, PwC Switzerland
+41 58 792 57 55
Daniel Kapetanovic
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