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Wolters Kluwer's latest report shows 74% BEPS compliance progress
Wolters Kluwer Tax & Accounting Asia Pacific (APAC) has revealed promising data from its latest BEPS Pillar Two Readiness Index Report for Q1 2024, highlighting the accelerating global adoption of the BEPS Pillar Two initiative. The initiative, part of the OECD’s Base Erosion and Profit Shifting (BEPS) framework, aims to enhance global tax compliance among multinational corporations.
The BEPS Pillar Two Readiness Index, which serves as a barometer for global tax compliance readiness, shows that over 70% of organisations have already begun preparations to comply with the new requirements. Notably, 58% of these organisations are transitioning into the middle-to-late stages of preparedness. Confidence in international collaboration has also seen a significant boost, with 60% of respondents now deeming it achievable, up from 45% in the previous quarter.
“There is a critical need for multinational companies to meet and manage the complex global requirements related to BEPS Pillar Two, and we are encouraged by the progress that organisations are continuing to make in their compliance efforts,” said Andy Hung, Director of Product Management at Wolters Kluwer TAA APAC. “Wolters Kluwer remains committed to supporting our clients as they look to standardise processes and drive more efficient data collection processes.”
The report reveals several key insights:
- Recognised Benefits: A strong 74% of organisations are already recognising the positive effects of the BEPS Pillar Two initiative. These benefits include streamlined processes and increased standardisation across varying jurisdictions.
- Adoption of Tax Technology: Technology is crucial in addressing the challenges posed by BEPS Pillar Two. A majority of respondents (61%) are prioritising the centralisation and consolidation of various tax processes via a single platform, while 58% are focusing on increasing automation processes. Additionally, 34% of organisations are actively considering implementing tax technology solutions to streamline their tax obligations.
- Anticipated Challenges: Despite the overall positive reception, 70% of respondents foresee potential concerns or challenges related to international collaboration.
- Hurdles to Implementation: Key challenges include legislative uncertainty, understanding data requirements, and access to limited resources.
Wolters Kluwer’s BEPS Pillar Two technology solution stands out as a vital tool for multinational corporations striving to comply with new requirements while optimising operational efficiency. The CCH Integrator BEPS Pillar Two solution is designed specifically to assist corporate tax departments in simplifying and streamlining reporting obligations. This comprehensive platform guides users through the entire data capture, calculation, and reporting requirements of Pillar Two.
The BEPS framework, which involves over 145 countries and jurisdictions, aims to tackle tax avoidance, improve the coherence of international tax rules, and ensure a more transparent tax environment. Starting in 2024, multinational enterprises with consolidated global revenue over €750 million will be subject to a global minimum effective tax rate of 15%.