Preparing for the 30 June 2026 Pillar 2 filing deadline
The OECD’s Pillar 2 framework, part of the Base Erosion and Profit Shifting (BEPS) 2.0 initiative, introduces a global minimum tax rate of 15% for multinational groups with consolidated revenues exceeding €750 million. These rules aim to ensure large businesses pay a fair share of tax in every jurisdiction where they operate.
The first filing window for Pillar 2 is now open, with the initial filings due by 30 June 2026 for UK businesses that are in scope and have a December year-end.
Who is in scope?
If a group meets both of the following criteria, they are in scope for Pillar 2 and will have filing requirements in the UK:
- The group has at least one UK taxable entity.
- The group has recorded annual revenues of €750m or more in at least two of their last four accounting periods.
Pillar 2 applies to businesses for accounting periods beginning on or after 31 December 2023. Those businesses have until six months after the end of their first accounting period after this date to register with HMRC – meaning the 30 June 2025 for December year-end groups.
Differences to be aware of
Not every country has implemented Pillar 2. Some jurisdictions (e.g., the US) do not intend to adopt it, while others (e.g., Greece) are still in the process. This creates complexity for multinational groups.
Practical scenarios for UK groups
Scenario 1: Overseas Parent jurisdiction has implemented Pillar 2
UK entities will generally need to:
- Submit an Overseas Return Notification to HMRC identifying the GloBE filing jurisdiction.
- Submit a UK Pillar 2 return via approved specialised software.
- If the UK entity has a top-up tax liability (e.g., due to a low tax subsidiary), a full UK Pillar 2 return with payment will be required.
UK parent companies of large groups will additionally need to submit a GloBE information return (also referenced to as GIR).
Scenario 2: Parent jurisdiction has not and will not implement Pillar 2
This applies to certain jurisdictions including the United States, which is operating separate regimes (GILTI and CAMT).
In these cases:
- UK entities will still be required to submit a UK Pillar 2 return, and potentially a GloBE return dependant on the worldwide group.
- They may be liable for top-up tax in the UK, depending on effective tax rates across the group.
This adds significant complexity due to the lack of jurisdictional alignment. The OECD announced new Side-by-Side (SbS) exemption which effectively exempts US-parented groups; however, this will not be implemented until periods after 1 January 2026.
Scenario 3: Parent jurisdiction is implementing Pillar 2 but not in time for Dec 2024 year ends
Where implementation is underway but not yet effective:
- UK entities should expect filing obligations, including the Overseas Return Notification.
- They may be liable for top-up tax in the UK, depending on effective tax rates across the group.
Early assessment is essential to avoid late filings.
How can businesses prepare?
- Confirm scope – Engage with Group Finance or Tax teams to assess whether your group meets the revenue and jurisdiction criteria, confirm the group filing member for the GloBE Information Return filing requirements.
- Register with HMRC – Ensure registration deadlines are met to avoid penalties.
- Plan for compliance – Build a roadmap for timely filing and ongoing monitoring across multiple jurisdictions.
We’re here to help
Navigating Pillar 2 compliance is complex, at Azets, we provide expert guidance on:
- Registration for the UK returns for BEPS Pillar 2.
- Safe harbour eligibility and the effect on your UK statutory accounts.
- Prepare and submit the required UK Self Assessment return in respect of DTT and MTT.
If you would like support with your Pillar 2 compliance strategy, get in touch with a specialist corporate tax adviser via the form below.
