Pillar Two vs BEPS 1.0
The first BEPS package changed how existing rules were applied; Pillar Two adds a new minimum tax computed from accounting data no existing return produces.
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The first BEPS package changed how existing rules were applied; Pillar Two adds a new minimum tax computed from accounting data no existing return produces.
Side by side
| Pillar Two | BEPS 1.0 | |
|---|---|---|
| Mechanism | A minimum effective tax rate per jurisdiction | Anti-abuse and transparency measures within existing rules |
| Outputs | Top-up taxes and new returns | Country-by-country reporting, the MLI, the principal-purpose test |
| Data needed | Adjusted accounting data by constituent entity | Transfer-pricing and treaty documentation |
| In scope | Groups above a consolidated revenue test | Effectively all multinational groups |
| First task | Identify constituent entities and map the data | Get documentation and treaty positions in order |
Which one applies to you
If the group is above the revenue test, Pillar Two is a data project before it is a tax project. Below it, the first package's obligations still apply in full and are where the exposure actually sits.
How to get this moving
If you already have an adviser, we will tell you what they should be asking rather than replacing them.
Reviewed for the 2025 and 2026 filing seasons by Udit Gupta, Cross-Border Tax Expert, Legal Quotient Consultants. General information, not advice for your circumstances — call our 24-hour helpline to discuss your own position.
Pillar two beps — what this page covers
This is the page to read on pillar two beps. It takes pillar Two vs BEPS 1.0 in order — the test that decides who is affected, the returns and forms that follow from it, and a fee quoted in writing before anything starts.
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What working with us on pillar two vs beps 1.0 looks like
4 global offices
Meet us in person in India, the USA, Canada and the UAE, or send everything through the secure portal — the same process either way.
Late and missed years are ordinary work
An unfiled history is not a reason to wait longer. We assess what is still open and what relief the delay attracts before the first return goes in.
The reporting penalties get named early
The heaviest exposure on a cross-border file is usually a disclosure form, not the tax. We identify which ones apply before a deadline turns into a penalty.
Every figure on a page is traceable
Where a rate or a threshold appears in our writing it names the tax year it belongs to. Where it could not be confirmed, the page describes the mechanism and quotes no number.
Files that look like this one
Scoping a group against the consolidated revenue test
A group with operations in several countries had been told by a bank that it needed to prepare for a minimum tax and arrived expecting a large project. We took the consolidated accounts, applied the revenue test and documented the conclusion, which was that the group sat below it. The engagement produced a written scoping memorandum the board could rely on, the working behind it, and a note of the figure at which the answer would change. That turned an open-ended worry into a defined item to revisit, and redirected the work towards the obligations that did apply.
Mapping constituent entities across a structure built by acquisition
A group that had grown by buying businesses in different countries held a legal entity list maintained by the company secretarial team and a consolidation that did not match it. Before any computation could be attempted, the population of entities had to be settled. We reconciled the consolidation against the entity register, identified branches and partnerships that appeared in one and not the other, and resolved each difference. The engagement produced an agreed list of constituent entities by jurisdiction, a record of how each inclusion or exclusion was decided, and an owner inside the group for keeping it current.
Pulling adjusted accounting data out of a consolidation system
A finance team could produce group accounts and statutory accounts but nothing in between at the granularity the computation needed. We worked with the controllers to trace where each constituent entity's figures originated, what adjustments were being made on consolidation, and which of those adjustments mattered for an effective rate calculated by jurisdiction. The engagement produced a documented data map from source ledger to the figures the computation consumes, a list of the gaps that had to be closed in the reporting system, and a first set of jurisdictional results the team could reproduce themselves.
A group below the test that still had real exposure
Having concluded that the minimum tax did not reach them, a group assumed the wider international agenda was someone else's problem. We reviewed what the earlier package actually required of them and found transfer-pricing documentation that had not been refreshed since the structure changed, and intra-group arrangements that predated the current treaty position. The engagement produced updated documentation for the material flows, a reasoned file on the arrangements most likely to be questioned, and a short list of changes the group made before an authority raised them rather than afterwards.
Treaty positions reviewed after the multilateral instrument applied
A holding structure had been put in place long before the multilateral instrument changed the treaties it depended on, and nobody had revisited it since. We identified which treaties in the chain had been modified, what the principal-purpose test meant for each arrangement, and where the commercial reasons for a structure existed but had never been written down. The engagement produced a documented rationale for each entity in the chain, a note of the arrangements where the position was genuinely weak, and a recommendation on those, which the group acted on.
Country-by-country reporting reconciled with the statutory accounts
A group had been filing its country-by-country report from a spreadsheet built each year by a different person, and the figures no longer tied to anything. We rebuilt the report from the consolidation, reconciled each jurisdiction to the underlying statutory results, and documented every difference that survived. The engagement produced a report that could be traced back to source, an explanation of the remaining variances written down before anyone asked for it, and a repeatable process. It also gave the group a head start on the data question the minimum tax would put to it later.
First Canadian Return After Arriving Mid-Year
The arrival date splits the year and sets the cost base of what you brought with you. Getting that date and those values right is what determines whether a later sale is taxed on the whole gain or only on the part that accrued after landing.
Read how this one runsGreen Card Kept, Moved to Canada — Both Returns Still Due
Holding a green card does not end the US filing obligation, and living in Canada starts a Canadian one. The engagement fixes residence under the treaty tie-breaker, then decides which return the relief is claimed on so the two do not contradict each other.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
International Tax Planning & Advisory
Strategy and compliance for income, assets and families spread across borders.
U.S. & Cross-Border Tax Returns
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Transfer Pricing & BEPS
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Technology & SaaS
Software revenue crosses borders by default — sourcing rules, withholding on licence-like payments and IP location decide the effective rate.
Software revenue is rarely taxed where the team sits. Licence, subscription and service income are characterised differently by each side, and the answer decides withholding at source, treaty relief and whether a foreign customer creates a taxable presence at all — questions that are cheap to settle before the contract and expensive afterwards.
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
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Professional Services Firms
- Reg 105 / 102 waivers
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Importers, Exporters & Manufacturers
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Athletes, Artists & Entertainers
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Remote Workers & Digital Nomads
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Investment Funds & Holding Companies
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