Pillar 2: key deadlines for the first reporting year

The introduction of Pillar 2 marked a significant shift in international taxation, data collection and group reporting. In the Netherlands, the global minimum tax framework has been transposed into domestic legislation effective for financial years starting on or after 31 December 2023. And the first deadlines are nearing.

Multinational groups and certain large domestic groups within scope of Pillar 2 face a challenge: how do you ensure timely and efficient compliance within the set deadlines? Our experts discuss Pillar 2 in the Netherlands and the first reporting year for the GloBE Information Return and top-up taxes.

What is Pillar 2 in the Netherlands?

Pillar Two introduces a minimum effective tax rate (ETR) of 15% on a jurisdictional basis. This applies to groups with consolidated revenues exceeding € 750 million. Where the effective tax rate in a jurisdiction falls below this threshold, a “top-up tax” is levied.

Although Pillar 2 is being implemented in many countries around the globe, the specifics may differ bas on local implementations and opt-outs. In the Netherlands, the legislation includes:

• The Income Inclusion Rule (IIR), applicable in the Netherlands as of 2024;

• The Undertaxed Profits Rule (UTPR), generally effective from 2025; and

• A qualified domestic top-up tax (QDMTT), aimed at taxing low-taxed Dutch profits in the Netherlands rather than abroad, effective from 2024.

While the framework is highly technical, it is built around a relatively straightforward principle: aligning taxation outcomes with economic activity and limiting profit shifting to low-tax jurisdictions. As such, it is worth noting that there is a certain amount of overlap with other (reporting) obligations, but Pillar 2 is not the same as e.g. transfer pricing or public CbCR.

For CEOs and CFOs, Pillar 2 is not merely a tax compliance exercise. It directly impacts the (group) effective tax rate and cash positions, and possibly even influences investment decisions and operating models.

Deadlines: more pressing than they may seem

The first reporting year is financial year 2024, for most groups with a book year matching the calendar year. As this is the first reporting year, a brief extension has been approved to certain deadlines.

• Filing deadline for the GloBE Information Return (GIR): within 15 months after year-end. For the first GIR, this is extended to 18 months for the first year, meaning the deadline is 30 June 2026 for FY2024.

• Filing deadline for the Dutch top-up tax return (where applicable): within 17 months after year-end. For the first return, this is extended to 20 months for the first year, meaning the deadline is 31 August 2026 for FY2024.

• Filing a notification: if the entity that files the GIR is not located in the Netherlands, you may be required to notify the Dutch tax authorities which entity will file the GIR, and where. The deadline is the same as the GIR filing deadline: 30 June 2026.

Read more about the technical content of the various reports and returns here.

From compliance to control and optimisation

As Pillar 2 calculations rely on financial accounting data with significant adjustments, it is important that finance and tax functions are aligned. Our experts would be happy to assist you in ensuring a timely and correct filing.

At Baker Tilly, we support organisations with Pillar 2, from the first impact assessments to implementation and ongoing compliance. More importantly, we help you translate these technical requirements into actionable opportunities, using insights gained from Pillar 2 reporting to optimise your business.

By now, many organisations have already scoped out their exposure to Pillar 2 requirements. The introduction of transitional safe harbours may provide temporary relief, but it also adds complexity and requires documentation. Where this scope is still unclear or the reporting is not yet fully under control, it is important to act swiftly and strategically. Necessary actions may include:

• Performing a Pillar 2 impact assessment, including safe harbour eligibility;

• Mapping deadlines, data gaps and system requirements;

• Implementing the required governance frameworks and internal controls; and

• Assessing structural implications opportunities, such as entity structuring, financing, supply chains and other optimisations.

Would you like to know more about Pillar 2 in the Netherlands? The advisors at Baker Tilly would gladly tell you more.

The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.