Pillar 2: What you need to know before 30 June 2025

The Organisation for Economic Co-operation and Development (OECD)’s Pillar 2 establishes a global minimum tax aimed at large multinational enterprises. With international tax rules changing rapidly, the OECD’s pillar 2 global minimum tax rules have created new challenges, especially for companies in the US. Read more in our blog here.

What is Pillar 2?

Pillar 2 is part of the OECD’s Base Erosion and Profit Shifting (BEPS) two-part solution. It is designed to address tax avoidance by ensuring that large multinational groups pay a minimum level of tax. The rules introduce a 15% global minimum effective tax rate for companies with annual consolidated revenues of over €750 million in two of the past four accounting periods.

The rules apply a multinational “top-up tax” in respect of jurisdictions where the effective tax rate falls below the 15% threshold. The top-up tax is collected by the country where the ultimate parent is resident. However, if the country with a low effective tax rate has a qualifying domestic top up tax, it takes priority.

Preparing for Pillar 2

With the UK registration deadline approaching, CFOs should consider taking the following steps:

Determine scope

Confirm whether the group exceeds the €750m consolidated revenue threshold in at least two out of the past four years and is in scope of the Pillar 2 rules

Identify affected jurisdictions

Map out the jurisdiction in which the group has a presence. Then establish when the Pillar 2 rules are being implemented to understand the group’s registration and filing obligations in each jurisdiction

Register with tax authorities

Ensure timely registration or notification in all relevant jurisdictions. In the UK, in scope groups with a 31 December year end must register a filing member by 30 June 2025

Assess financial reporting impacts

Review disclosure requirements for statutory accounting purposes and prepare for potential changes to deferred tax accounting and effective tax rate forecasting

Evaluate systems and processes

Assess whether current systems can support the data and reporting requirements of Pillar 2. Identify gaps and make a plan for remediation

Engage stakeholders

Communicate with auditors, board members and investors about the expected impact and the organisation’s readiness

UK Pillar 2 registration

Pillar 2 represents a fundamental shift in international tax policy. For large multinational groups, the 30 June 2025 registration deadline marks a critical first step in a broader compliance journey. Early action can reduce compliance risk, positioning organisations to respond effectively as the global tax environment continues to evolve.

Pillar 2 FAQs

Does the group need to register in the UK, even where an overseas parent entity is registering for Pillar 2 in an overseas jurisdiction?

Yes. If your group is within the Pillar 2 regime and has a subsidiary or permanent establishment in the UK, the group must register a “filing member”.

Does the “filing member” need to be UK resident?

No. HMRC automatically treats the filing member as the ultimate parent entity, even if it is not a UK resident. If a group wishes to elect for a UK resident company to be the filing member, the ultimate parent entity must nominate them in writing. You don’t need to submit the nomination to HMRC, but you should keep it on file.

What is a “filing member” responsible for?

The company will be responsible for submitting the self-assessment return and the global information return (or overseas notification if it is filed in another jurisdiction). The filing member is also the main point of contact for HMRC correspondence regarding Pillar Two. They are also responsible for keeping records.

What is the deadline for registering in the UK?

Groups must register the filing member no later than six months following the end of the first accounting period the group falls within the Pillar 2 regime. The deadline is 30 June 2025 for groups drawing up accounts to 31 December 2024

Will the group need to register the filing member every year?

No. Provided the filing member remains the same, groups do not need to register every year. They only need to register the first year the group falls within the scope of Pillar 2.

Is the filing member responsible for paying the top-up tax?

No. The entity responsible for paying the multinational top-up tax will depend on the structure of the group and jurisdictions involved.

If top-up tax is due in the UK under the domestic qualifying top-up tax, it will be due from the entity which is liable under the calculation rules.

What information do I need to register a UK filing member?

A UK government gateway log in. You must create a Government Gateway account if the filing member doesn’t already have one
The name and registered address for the ultimate parent entity
The name and registered address for the filing member, if it is not the ultimate filing entity
If the filing member or the ultimate parent entity is a UK limited company or limited liability partnership, you must provide the company registration number and unique taxpayer reference
Whether the group being registered only has entities located in the UK or in the UK and other jurisdictions
The start and end date of the group’s accounting period
Contact details and preferences, for one or 2 individuals or teams in the group
A contact postal address for the group

The registration essentially notifies HMRC which entity in the group will be responsible for filing in the UK. The group does not need to provide information about all UK entities.