Audit readiness                                                                   Navigate Pillar Two with confidence

Getting ready for the disclosure requirements – a Middle East perspective                                                                                             December 2023

Pillar Two signifies one of the biggest shifts in the international tax landscape in decades, creating a huge compliance and reporting challenge for all large Multinational Enterprise (MNE) Groups in addressing this.  

We are soon facing the Pillar Two legislation as many countries, especially in Europe, are expecting to (substantively) enact Pillar Two legislation before the end of 2023. This legislation is a national implementation of the OECD base erosion and profit shifting project and is aimed at implementing a global minimum tax of 15%. 

Under most major accounting standards, a disclosure is required in relation to the expected Pillar Two impact in the year-end 2023 financial statements in countries that have enacted Pillar Two legislation.

It is also crucial to note that the upcoming United Arab Emirates (UAE) corporate tax (CT) regime will trigger further disclosure requirements for groups with UAE operations. These requirements aim to provide stakeholders with material information on the impacts of UAE CT on a going-forward basis. It will be important to identify the interaction with Pillar Two and the disclosures during this year-end process.

To navigate this complex issue, Deloitte can aid in timely preparation for year-end audits, ensuring the compliant disclosure of relevant narratives in line with International Financial Reporting Standards (IFRS).

In this article, we discuss the introduction and implementation of Pillar Two, the impact and disclosure requirements. We also explore Audit readiness, along with how Deloitte can help.

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