Preparing for The Global Future of Tax: Blue J Now Covers OECD Pillar Two Content

As part of our commitment to consistently finding new ways to generate better tax answers, Blue J has once again expanded our content library, this time to include OECD Pillar Two Content. With this update, Blue J now delivers better tax answers on the global minimum tax rules for multinational enterprises. 

For firms, this means their teams will have a leg up when providing vital compliance and advisory services needed by clients with entities in their structure affected by the framework set forth in the OECD’s model rules. As more countries in the OECD’s inclusive framework adopt a global minimum tax, this update will help firms to deliver even more value to clients from large multinational enterprises.

A Whole New Kind of Tax Content

Prior to this update, Blue J’s curated content library was fully divided based on geography, with no overlap between tax data sources for the US, Canada, and the UK. What makes OECD Pillar Two Content unique is that its effects may be felt across all three of these geographies. Accordingly, the GloBE Model Rules and Commentary have been integrated into the content libraries for the United States, Canada, and the UK, with our Canadian and UK platforms also updated to include their respective laws that implement Pillar Two. Now, no matter what tax data source you’re using, you’ll be able to ask questions on the current OECD Pillar Two rules and recommendations. 

Beyond empowering firms to better serve their multinational enterprise clients affected by any of the jurisdictions that have adopted OECD Pillar Two rules, this update also prepares firms for the future of tax. The widespread adoption of OECD Pillar Two Global Minimum Tax rules represents an important shift in how taxes are levied. In an increasingly connected and globalized world, one where tax is no longer just tied to geography, practitioners need to think beyond the borders in which their clients operate. This content provides a way for them to start doing just that. 

Understanding OECD Pillar Two

To fully understand the significance of this content update, it helps to explore exactly what OECD Pillar Two entails. By way of some quick background, the OECD (or the Organization for Economic Co-operation and Development) is an international organization promoting policies to improve economic and social well-being globally. One focus area of the OECD is international taxation. 

Since 2013, the OECD has led efforts to address tax avoidance through the BEPS (Base Erosion and Profit Shifting) initiative. BEPS refers to tax strategies that exploit gaps in tax rules to shift profits to low or no-tax jurisdictions, resulting from the digitalization of the global economy.

In 2016, the OECD established the Inclusive Framework on BEPS. The Inclusive Framework brings together 147 nations, allowing them to work together on equal footing. The Inclusive Framework monitors BEPS implementation and involves international organizations, regional tax bodies, and stakeholders. Pillar Two addresses BEPS implementation by providing a set of agreed-upon model rules to implement a global minimum tax, referred to as the GloBE (Global Anti-Base Erosion) Model Rules. 

Notably, the GloBE Model Rules are relevant for tax practitioners in member jurisdictions and non-member jurisdictions alike, as the rules effectively allow for top-up taxes to be levied on multinational enterprises in complying jurisdictions, to ensure they pay the minimum tax of 15%. However, there are some limitations regarding which multinational enterprises would be subject to these rules, namely only those with consolidated revenue of at least €750 million and a permanent establishment in a jurisdiction that has enacted the model rules. 

In addition to the model rules themselves, the OECD has published administrative guidance and implementation frameworks to help members of the Inclusive Framework enact the rules into their domestic tax law. Many members of the Inclusive Framework have enacted a substantial portion of the model rules effective as of January 1, 2024, including Canada and the UK, potentially resulting in real tax cost and compliance implications for multinational enterprises. 

Looking to the Global Future of Tax

The inclusion of OECD Pillar Two in Blue J’s content library represents a significant step in empowering tax professionals to provide vital compliance and advisory services in an increasingly globalized world. However, it’s only one step. As tax continues to evolve beyond geographic boundaries, Blue J will continue to evolve as well. We’re building the future of tax research, so tax experts can excel in the future of tax. 

‍To discover how Blue J can transform your tax research—for Pillar Two-related questions and more—book a demo to speak with one of our experts.

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