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BEPS 2.0 is a two-pillar project driven by the Organisation for Economic Co-operation and Development (OECD), with strong support from the Group of 20 (G20). From 2024, Pillar Two of BEPS 2.0 will fundamentally change how global enterprises are taxed. The Pillar Two Model Rules [also referred to as the Global Anti-Base Erosion (GloBE) or Global Minimum Tax Rules] are designed to ensure large multinational corporations (MNCs) pay a minimum level of tax in the countries in which they operate.
In Malaysia, most MNCs are at the start of their global minimum tax assessment journey and are evaluating the impact of the new tax rules on their tax liabilities, financial statements (including disclosure requirements in the lead-up to Pillar Two implementation) and statutory tax filings.
Preparation for BEPS 2.0 will require significant effort from MNCs, but it also presents opportunities for finance transformation. MNCs need to conduct comprehensive assessments on their current financial accounting and tax systems, processes and operating models.
Increased reporting obligations mean companies must develop new data collection and collation processes across a wide range of functions, including tax, finance, human resources and IT. MNCs need to re-organize their internal processes and systems to ensure their ledger and reporting systems, and data flows are ready for the new forecasting, reporting, disclosure, audit and ultimately, statutory compliance requirements.