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Pillar 2 seeks to end the ‘race to the bottom’ on tax rates worldwide. In a further clampdown on aggressive tax planning, Pillar 2 would also make it much harder to minimise tax by recording profits in low tax jurisdictions and costs in high tax counterparts. But agreement in principle is one thing. Enacting Pillar 2 in national legislation and applying it in practice is another
Pillar 2 has been ratified by the governments of more than 100 countries, so U.S. multinationals are likely to deal with its effects in many places.
So why is Pillar 2 so strategically critical and how can businesses turn a potential challenge into a source of competitive advantage?
Delays in legislation and implementation of OECD Pillar 2 may encourage some businesses to put preparations for this tax shake-up on the backburner. But the heightened uncertainty created by these delays makes adapting now even more important than before. Pillar 2 can be a catalyst for change if it is built into transformation plans from the outset. Those with the confidence, agility and knowhow to build the operational and business model changes required by Pillar 2 into the wider strategy of their business will increase resilience and minimise disruption when the inevitable does happen. In short, acting today will make tomorrow easier and increase competitive advantage.
Given the need to find out how much the tax bill could rise under Pillar 2 and with the compliance demands likely to put systems under severe strain, the case for getting preparations underway is compelling.
We round-up the progress on implementation in a selection of leading economies worldwide. We also look at the impact on businesses, likely go live timings and what could potentially delay or derail the process.
An overview of transfer pricing rules in Vietnam and who to contact for expert guidance.
An overview of the indirect tax rules in Vietnam
This expatriate tax guide provides an overview of the tax system and regulations that will affect your international mobile employees in Vietnam.