Implementation of Pillar Two global tax system accelerates

A new era in global taxation

For decades, multinational enterprises (MNEs) have navigated a fragmented landscape of global tax rules, often finding themselves caught between disparate local requirements and the pressure to optimize profit shifting. The OECD’s Pillar Two initiative is designed to ensure that large multinational corporations pay a minimum effective tax rate of 15%. Marking a new era in international taxation rules, this is a coordinated effort to ensure that capital is taxed where value is created.

Core mechanisms of the framework include the:

• Income Inclusion Rule (IIR) - requires a parent company to pay Top-up Tax on profits of its low-taxed subsidiaries so that those profits are effectively taxed at the agreed minimum rate.
• Undertaxed Profits Rule (UTPR) - serves as a backstop to the IIR by denying deductions or requiring adjustments in Group entity jurisdictions where the IIR does not apply, effectively reallocating taxing rights within the Group to ensure that income is taxed at the agreed minimum rate. 
• Qualified Domestic Minimum Top-up Tax (QDMTT) - enables countries to collect the Top-up Tax locally before it is taxed by a foreign authority.

The strategic deployment of the QDMTT is especially noteworthy. It indicates a hierarchy of mechanisms that prioritizes national interests. Slovakia, for instance, implemented the QDMTT for fiscal years starting after December 31, 2023, while strategically deferring the IIR and the UTPR until 2029. In comparison, financial hubs like Switzerland and Singapore are already utilizing the QDMTT alongside the IIR to further strengthen their fiscal authority. 

Detailed country profiles for Slovakia, the Netherlands, Switzerland, Singapore and Germany show how these jurisdictions have largely integrated these Pillar Two mechanisms into domestic law for Groups with consolidated revenues exceeding EUR750 million. In contrast, the tracker below highlights that Mexico has yet to adopt the framework or establish specific implementation legislation.

Each summary specifies critical compliance details, including effective dates, registration requirements, and filing deadlines for tax returns.

Alignment with OECD Guidance

To date, over 50 countries have implemented or enacted domestic legislation aligned to Pillar Two.   
Those jurisdictions that have implemented legislation, including Slovakia, the Netherlands, Switzerland, Singapore and Germany, explicitly design their laws to be interpreted consistently with the OECD GloBE Model Rules and subsequent Administrative Guidance. Although Mexico is not yet an adopter, is expected to follow this trend as an active member of the OECD Inclusive Framework.

To ease the transition to the new tax regime, most jurisdictions have adopted Safe Harbor rules. These generally align with OECD Administrative Guidance.

OECD Pillar Two-Country Status Snapshot

Slovakia

Question	Slovakia - current position
Has the OECD Pillar Two framework been adopted into domestic law?	Yes. Slovakia has implemented the GloBE rules via Act No. 507/2023, effective from 31 December 2023. This aligns with the EU Minimum Tax Directive.
What is the minimum revenue threshold for scope?	MNE Groups with consolidated global revenue of EUR750 million or more, consistent with OECD/EU rules.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	The QDMTT rules apply to fiscal years starting after 31 December 2023.  In Slovakia, the IIR and UTPR is currently deferred until 31 December 2029, as permitted under the EU Directive.
When do the rules apply?	Yes. Slovakia has adopted both transitional Safe Harbor based on CbCR and permanent Safe Harbor for immaterial entities.
Has the jurisdiction adopted Safe Harbor rules?	Yes. Slovakia has adopted both transitional Safe Harbor based on CbCR and permanent Safe Harbor for immaterial entities.
Are there notification or registration requirements?	Yes. Entities must submit a Notification concerning the application of the global minimum tax rules alongside the Top-up Tax Return.
Is there a prescribed format for the tax return?	Yes. The Slovak Tax Authority will issue standardized forms for both the Notification and the Tax Return.
What is the deadline for filing the tax return?	The standard deadline is 15 months after the end of the fiscal year. For the first fiscal year (starting in 2024), this deadline is extended to 18 months (i.e., by 30 June 2026).
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Yes. Slovak legislation is designed to be interpreted consistently with the OECD GloBE Model Rules and the relevant Administrative Guidance issued by the Inclusive Framework.

The Netherlands

Question	The Netherlands - current position
Has the OECD Pillar Two framework been adopted into domestic law?	Yes. The Netherlands has implemented the GloBE rules through the Minimum Tax Act 2024, effective from 31 December 2023, aligning with the EU Minimum Tax Directive.
What is the minimum revenue threshold for scope?	MNE groups with consolidated global revenue of EUR750 million or more, consistent with OECD/EU rules.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	The Netherlands has implemented all three rules – the Income Inclusion Rule (IIR), the Undertaxed Profits Rule (UTPR), and the Qualified Domestic Minimum Top-up Tax (QDMTT) – as of 31 December 2023. The QDMTT allows the Netherlands to collect the Top-up Tax locally.
When do the rules apply?	The rules apply to fiscal years starting on or after 31 December 2023.
Has the jurisdiction adopted Safe Harbor rules?	Yes. The Netherlands has adopted the transitional Safe Harbor based on Country-by-Country Reporting (CbCR) and a permanent Safe Harbor for immaterial entities, in line with the EU Directive and OECD Administrative Guidance.
Are there notification or registration requirements?	Yes. Entities within the scope must submit a Notification to the Dutch Tax Authority regarding the application of the GloBE rules, as well as a Top-up Tax Return.
Is there a prescribed format for the tax return?	Yes. The Dutch Tax Authorities will provide standardized electronic forms for both the Notification and the Top-up Tax Return.
What is the deadline for filing the tax return?	The standard deadline is 17 months after the end of the fiscal year. For the first fiscal year (starting in 2024), the deadline is 30 June 2026 for the information return and 31 August for the tax return and tax payment.  This means in the second fiscal year (2025) the information return is due on 31 March 2027 and the tax return and tax payment on 31 May 2027 (17 months).
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Yes. Dutch legislation is designed to be interpreted consistently with the OECD GloBE Model Rules and the relevant Administrative Guidance issued by the Inclusive Framework.

Switzerland

Question	Switzerland - current position
Has the OECD Pillar Two framework been adopted into domestic law?	Yes. Switzerland has implemented the GloBE rules through an amendment to the Federal Constitution (Art. 129a BV) and by issuing a temporary ordinance (Mindestbesteuerungs-verordnung), which has been effective since 1 January 2024.
What is the minimum revenue threshold for scope?	The rules apply to MNE Groups with consolidated global revenue of EUR750 million or more, in line with OECD rules.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	Switzerland has implemented the Income Inclusion Rule (IIR) and the Qualified Domestic Minimum Top-up Tax. The QDMTT allows Switzerland to collect the Top-up Tax locally.
When do the rules apply?	The QDMTT applies from 1 January 2024 and the IIR applies from 1 January 2025. The Undertaxed Profits Rule (UTPR) has been postponed indefinitely and is not currently applicable.
Has the jurisdiction adopted Safe Harbor rules?	Yes. Switzerland has adopted the transitional Safe Harbor based on Country-by-Country Reporting (CbCR) and is listed as qualified for the QDMTT Safe Harbor.
Are there notification or registration requirements?	Yes. Entities within the scope must register and file the Swiss Local Information Return (LIR) and the GloBE Information Return (GIR) electronically via the web-based platform OMTax no later than 30 June 2026; if a MNE Group has several Swiss Constituent Entities, only one of them needs to register and file the returns (so-called One-Stop-Shop-Concept). In circumstances where the GloBE Information Return (GIR) is not filed in Switzerland, but instead submitted by a designated foreign group company—referred to as the “Designated Filing Entity”—that is resident in a partner country, specific notification requirements must be observed. The approval process for the international legal basis facilitating the exchange of GloBE information, under the Multilateral Competent Authority Agreement on the Exchange of GloBE Information, remains subject to ongoing Swiss internal consultation. In these cases, it is mandatory to notify the Swiss Tax Authority of the country in which the GIR has been submitted.
Is there a prescribed format for the tax return?	Yes, the tax return must be filed electronically through the web-based platform OMTax and includes two components: the LIR and GIR.  The LIR is already available. It can only be submitted electronically via the web-based platform OMTax. Before submission, the Group entity must register and obtain a registration code to activate and prepare the return.
What is the deadline for filing the tax return?	The standard deadline is 15 months after the end of the fiscal year. For the first fiscal year (starting in 2024), the deadline is 30 June 2026 (18 months) for the GIR, LIR and tax payment. For the second fiscal year (2025) the GIR, LIR and tax payment are due on 31 March 2027 (15 months).
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Yes. Switzerland’s legislation is designed to be interpreted consistently with the OECD GloBE Model Rules and the relevant Administrative Guidance issued by the Inclusive Framework.

Singapore

Question	Singapore - current position
Has the OECD Pillar Two framework been adopted into domestic law?	Yes. Singapore has implemented the GloBE rules through the Multinational Enterprise (Minimum Tax) Act 2024 (the MTT Act), which was passed into law on 8 November 2024.
What is the minimum revenue threshold for scope?	MNE Groups with consolidated global revenue of EUR750 million or more, consistent with OECD rules.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	Singapore has implemented the Income Inclusion Rule (IIR), which is referred to as the Multinational Enterprise Top-up Tax (MTT) in the MTT Act, and the Qualified Domestic Minimum Top-up Tax (QDMTT), which is referred to as the Domestic Top-up Tax (DTT) in the MTT Act. The implementation of the Undertaxed Profits Rule (UTPR) will be considered at a later stage.
When do the rules apply?	The rules apply to financial years starting on or after 1 January 2025.
Has the jurisdiction adopted Safe Harbor rules?	Yes. Singapore provides for four Safe Harbors in accordance with the GloBE rules: Traditional Country-by-Country Reporting (CbCR) Safe Harbor; Simplified Calculations Safe Harbor; QDMTT Safe Harbor; and Transitional UTPR Safe Harbor.
Are there notification or registration requirements?	Yes. The Ultimate Parent Entity (UPE) of an in-scope MNE Group must notify the Singapore Tax Authority of its liability to be registered under the MMT Act. All registered Multinational Enterprise (MNE) groups liable for MTT and/or DTT are required to file tax returns on their Top-up Tax liability in Singapore.  All registered MNE Groups are obligated to submit a GloBE Information Return (GIR) to the Singapore authorities. However, if the GIR is filed with another jurisdiction, and Singapore will receive the GIR through an exchange of information, it is necessary for the MNE Group to file a GloBE notification with Singapore. This notification serves to confirm that the required information will be made available to the Singapore authorities through the established exchange mechanism.
Is there a prescribed format for the tax return?	Yes. The Singapore Tax Authority will provide standardized electronic forms for the tax returns for MTT and DTT.
What is the deadline for filing the tax return?	The deadline for submitting both the MTT and DTT is 15 months following the end of each financial year. If the financial year qualifies as a transition year—defined as the first financial year in which the MNE Group becomes subject to the laws of any jurisdiction that enforces a qualified IIR or a qualified UPTR, or the first financial year for which the MNE Group is required to register under the MMT Act, whichever occurs first—the submission period is extended to 18 months.
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Yes. The MTT and DTT are based on the published GloBE Model Rules and the relevant Administrative Guidance issued by the Inclusive Framework.

Mexico

Question	Mexico - current position
Has the OECD Pillar Two framework been adopted into domestic law?	No. To date, Mexico has not adopted the OECD Pillar Two framework into domestic law, and the 2026 tax reform proposals do not yet include implementing legislation on this matter.
What is the minimum revenue threshold for scope?	Mexican tax legislation establishes a revenue threshold for MNEs to file the Local File, Master File, and Country-by-Country report when their income is equal to or above MXN 1,940,178,120. It is estimated that any minimum revenue requirement will be set at a similar level.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	Mexico has not yet implemented the OECD Pillar Two rules (IIR, UTPR, or QDMTT).
When do the rules apply?	Mexico has not yet implemented any of these Pillar Two tax reform rules.
Has the jurisdiction adopted Safe Harbor rules?	There is currently no Mexican IIR, UTPR, QDMTT or GloBE-specific safe harbor regime enforced.
Are there notification or registration requirements?	N/A.
Is there a prescribed format for the tax return?	N/A.
What is the deadline for filing the tax return?	The deadline for filing annual tax returns is 31 March.
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Mexico has not yet enacted Pillar Two rules. However, as an active member of the OECD Inclusive Framework, any future implementing legislation is expected to be aligned with the OECD Administrative Guidance, consistent with the way Mexican Transfer Pricing rules are broadly based on the OECD Transfer Pricing Guidelines.

Germany

Question	Germany - current position
Has the OECD Pillar Two framework been adopted into domestic law?	Yes. Germany has implemented the GloBE rules through the Minimum Tax Act (Mindeststeuergesetz), effective from 28 December 2023, aligning with the EU Minimum Tax Directive.
What is the minimum revenue threshold for scope?	MNE Groups with consolidated global revenue of EUR750 million or more, consistent with OECD/EU rules.
Which rules are currently applicable (IIR, UTPR, QDMTT)?	Germany has implemented all three rules – the IIR, UTPR, and QDMTT.
When do the rules apply?	The IIR and QDMTT apply to fiscal years starting on or after 31 December 2023. The UTPR applies to fiscal years starting on or after 31 December 2024.
Has the jurisdiction adopted Safe Harbor rules?	Yes. Germany has adopted the transitional Safe Harbor based on Country-by-Country Reporting (CbCR) and a permanent Safe Harbor for non-material entities, in line with the EU Directive and OECD Administrative Guidance. In addition, the German Minimum Tax Act provides for a transitional arrangement of a maximum of five years for companies with minor international activities.
Are there notification or registration requirements?	Yes. Entities within the scope must submit a Notification to the German Tax Authority regarding the application of the GloBE rules (group head notification) which is due within two months after the end of the calendar year.
Is there a prescribed format for the tax return?	Yes. The German Tax Authorities will provide standardized electronic forms for both the Notification and the Top-up Tax Return.
What is the deadline for filing the tax return?	The standard deadline is 15 months after the end of the fiscal year. For the first fiscal year (starting in 2024), the deadline is 30 June 2026 for both the information return and the tax return. Any taxes due are to be paid within one month after submitting the tax returns.
Are the rules in the jurisdiction aligned with OECD Administrative Guidance?	Yes. The German legislation is designed to be interpreted consistently with the OECD GloBE Model Rules and the relevant Administrative Guidance issued by the Inclusive Framework. The Minimum Tax Adjustment Act, which implements the latest Administrative Guidelines of the Inclusive Framework, is expected to be adopted by Germany soon.

As the status of deployment varies by jurisdiction and given the complexity and divergent local tax laws, MNEs with consolidated global turnover exceeding EUR750 million are advised to seek professional, cross border taxation guidance.  

As a global network with member firms in key jurisdictions, you can lean on CLA Global member firms to provide well-rounded support and stay on top of legislative and institutional developments. Discover how our member firms bring fresh perspective to your complex business tax affairs by contacting us using the details below.

For further information

Branislav Kovac
Partner at CLA Slovakia
https://www.linkedin.com/in/branislav-kovac-429358160/

Yves Cattel
Tax Advisor at Archipel Tax Advice (The Netherlands)
https://www.linkedin.com/in/yves-cattel-43590b8b/

Laurent Riedweg
Managing Partner at Riedweg & Partner AG (Switzerland)
https://www.linkedin.com/in/laurent-riedweg-b0198baa/

Ramiro Gonzales
Managing Partner at Gonzalez Espinosa y Asociados (Mexico)
https://www.linkedin.com/in/ramiro-gonzalez-flores-a398202b/

Paulina Mariani Venegas
Partner at CLA Mexico
https://www.linkedin.com/in/paulina-mariani-5ba4b327/?locale=en

Christof Büttcher 
Senior Partner at CLA dhpg (Germany)
https://www.linkedin.com/in/christof-buettcher-a0785379/

José Henrique Lopes 
Co-Founder and Partner at CLA Brasil
https://www.linkedin.com/in/jose-henrique-dux/

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