The new domestic and EU minimum-tax rules are no longer a technical issue reserved for large tax departments. For many groups, they now directly influence how shareholding chains are organised, where intermediate holding companies are located, how financing entities are used, and which group entity should own compliance, data and reporting responsibilities. Under the EU Minimum Tax Directive, the ordering of the Qualified Domestic Minimum Top-Up Tax (QDMTT), the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR) has made legal structure a central tax governance question rather than a purely historical one.

This is particularly true in 2026. The first EU top-up tax information return is expected by 30 June 2026, DAC9 now provides a framework for centralised reporting, and the OECD’s January 2026 Side-by-Side package has introduced further simplifications and additional safe harbours. As a result, adapting group structures to new domestic and EU minimum-tax rules must now be approached in a disciplined way: not only to manage cash tax exposure, but also to reduce fragmentation, secure data quality and make reporting defensible before multiple tax authorities.

The new rule order changes structural priorities

The starting point for any restructuring analysis is the order in which the EU rules operate. The Directive applies a sequence that gives priority to the QDMTT, then the IIR, and then the UTPR. This means that groups can no longer assess top-up tax exposure only from the perspective of the ultimate parent entity. They must first identify which domestic jurisdictions may impose a qualified domestic minimum tax before considering whether any residual top-up amount could be picked up higher in the ownership chain or elsewhere in the group.

In practical terms, this shifts attention to where entities are resident, where low-taxed profits arise, and whether the jurisdiction concerned has implemented a qualifying domestic regime. A structure that historically concentrated ownership or financing in one jurisdiction may now produce a very different minimum-tax outcome depending on whether a domestic top-up tax applies locally. The QDMTT therefore acts as a first-line structural constraint and must be mapped carefully before any redesign of group holdings, treasury entities or intellectual property arrangements is contemplated.

This hierarchy also increases the strategic importance of parent-company location. If domestic top-up tax is not fully collected at local level, the next question becomes where the IIR sits and which parent entity has responsibility for the inclusion. If that is not effective, UTPR exposure may arise in other jurisdictions. For this reason, adapting group structures to new domestic and EU minimum-tax rules requires a full chain analysis rather than a jurisdiction-by-jurisdiction review conducted in isolation.

Domestic groups are also in scope

An important point, sometimes underestimated by business leaders, is that the EU regime is not limited to traditional multinational groups. The Directive also reaches certain large-scale domestic groups. As a result, groups with little or no outbound activity may still need to revisit domestic holding structures, financing arrangements and reporting chains if they meet the relevant threshold conditions.

This broader scope alters the usual assumption that Pillar Two planning is mainly a cross-border exercise. A French-ed or largely domestic European group may still need to review whether its legal architecture is fit for purpose under the new minimum-tax framework. Domestic structures that were originally built for consolidation, financing flexibility or shareholder control can now create compliance burdens or unexpected top-up tax consequences if they are not aligned with the Directive’s mechanics.

For boards and shareholders, the message is clear: a domestic footprint does not remove the need for review. On the contrary, purely domestic groups can find themselves dealing with the same threshold-based and reporting-driven questions as multinational groups. This is one reason why adapting group structures to new domestic and EU minimum-tax rules should be treated as an enterprise-wide governance matter rather than as a project reserved for international tax teams.

Article 50 delay elections can affect parent-location decisions

Another live variable is the possibility, under Article 50 of Directive (EU) 2022/2523, for certain Member States with no more than 12 ultimate parent entities in scope to elect not to apply the IIR and UTPR for six consecutive fiscal years beginning from 31 December 2023. This election can materially influence where groups expect top-up tax to arise and how they evaluate the location of ownership chains during the transitional period.

Where a deferral applies, a group may reconsider whether it is efficient to centralise ownership in that jurisdiction or, conversely, whether doing so creates uncertainty once the deferral ends. The answer depends on the wider profile of the group: the presence of QDMTTs in operating jurisdictions, the location of low-taxed entities, the likely operation of foreign minimum-tax rules, and the group’s ability to support a central compliance model. A transitional advantage should therefore not be viewed in isolation from medium-term governance and reporting consequences.

This point is especially important for restructuring projects launched in 2026. A legal migration or insertion of a new holding entity may be costly and difficult to reverse. Groups should therefore model not only the immediate Article 50 landscape, but also the position once ordinary IIR and UTPR application begins. A structure that is efficient for one or two years may become burdensome later if it misaligns tax ownership, reporting responsibility and operational substance.

Reporting readiness is now driving restructurings

The first EU top-up tax information return is now close, with the European Commission indicating that in-scope multinational groups are expected to file by 30 June 2026. This has changed the rhythm of group adaptation. In many cases, the immediate question is no longer whether a structure is theoretically optimal over ten years, but whether the group can produce accurate, standardised and defensible information for the first filing cycle.

The Commission has also made clear that top-up tax calculations will normally be made by the ultimate parent entity unless another group entity is designated. That is a significant governance point. It means groups have a real structuring choice about where calculations, controls and accountability should sit. Some may prefer to keep this function at parent level; others may designate a more operationally suitable group entity with the systems and personnel needed to manage the process effectively.

Accordingly, entity rationalisation is increasingly linked to data rationalisation. If a group has multiple dormant companies, legacy financing vehicles, inconsistent ERP environments or unclear accounting ownership, these weaknesses will surface rapidly in minimum-tax reporting. The OECD’s GloBE Information Return infrastructure is now more mature, with the GIR and XML Schema user guide released in January 2025 and a Status Message XML Schema added in July 2025. This makes 2026 a practical deadline for aligning systems, responsibilities and legal entities.

DAC9 strengthens the case for centralised tax governance

DAC9 is one of the most important recent compliance developments for groups operating in the EU. The Commission’s position is explicit: “MNEs only have to file one top-up tax information return, at central level, for the entire group.” This simplification strongly favours governance models in which reporting lines, internal controls and tax data ownership are centralised and clearly documented.

Member States had until 31 December 2025 to implement DAC9, and the Commission adopted an implementing regulation in July 2025 to provide the technical solution for automatic exchange of top-up tax information between Member States. This means that group adaptation work in 2026 is no longer speculative. Domestic frameworks for exchange of information are enacted or becoming operational, and groups should assume that inconsistent local positions will be easier for authorities to identify.

From a structuring perspective, DAC9 supports a move away from fragmented local-filing models. Groups should examine whether the current legal structure facilitates a central reporting hub or obstructs it. In some cases, this may justify relocating tax governance functions, clarifying intercompany reporting obligations, simplifying sub-holding layers or designating a specific entity to coordinate calculations and filings. The objective is not merely formal compliance, but a coherent operating model capable of withstanding cross-border scrutiny.

The OECD January 2026 package may change the timing of restructurings

On 5 January 2026, the OECD Inclusive Framework released a major Side-by-Side package including a Simplified ETR Safe Harbour, a one-year extension of the Transitional CbCR Safe Harbour, a Substance-based Tax Incentives Safe Harbour, and the Side-by-Side System. The OECD also referred in its January 2026 webinar to “further simplifications, capacity-building efforts and additional resources for implementing jurisdictions and affected taxpayers.” For groups considering immediate legal changes, these developments may affect both timing and scope.

In particular, the new simplifications may reduce pressure for some groups to undertake wholesale restructuring in the short term. Where safe harbours are available, a group may prefer to prioritise elections, documentation, data clean-up and targeted governance measures before embarking on legal-entity migrations or major ownership-chain redesign. That can be a prudent approach where transitional relief is realistic and where the group needs time to test the interaction of domestic and foreign minimum-tax rules more fully.

That said, simplification does not remove the need for analysis. Safe harbours are conditional, and they do not eliminate the importance of core design decisions. Groups should use the revised OECD illustrative examples published on 9 May 2025, together with the January 2026 package, to model how holding, financing and intellectual property structures behave under the GloBE framework. A delayed restructuring is not the same as an unnecessary restructuring.

QDMTTs remain the central design constraint

Even after the January 2026 package, QDMTTs remain fundamental. OECD materials expressly include further guidance on the design of Qualified Domestic Minimum Top-Up Taxes, confirming that domestic minimum taxes are still the first line of defence in the architecture. In other words, simplification at the cross-border level does not displace the primary need to understand domestic top-up tax positions entity by entity and jurisdiction by jurisdiction.

Technical commentary on the Side-by-Side system suggests that eligible groups may in some cases switch off certain IIR or UTPR effects in other jurisdictions, while QDMTTs remain in place. For structuring purposes, that is highly significant. It means the main pressure point may move away from foreign residual collection and back toward domestic tax positions, local substance, local deferred-tax profiles and the consistency of domestic accounting data feeding the minimum-tax computation.

Groups should therefore avoid a common mistake: focusing exclusively on where the ultimate parent is established while underestimating the importance of domestic operating jurisdictions. If the QDMTT sits first, then local implementation quality, domestic incentives, entity substance and domestic reporting controls become decisive. This is why adapting group structures to new domestic and EU minimum-tax rules should begin with a granular domestic map before any broader parent-chain reorganisation is undertaken.

Global exchange and wider reform increase the value of simplification

The broader OECD project now spans 147 Inclusive Framework members, and the infrastructure for exchanging GloBE information is becoming increasingly robust. The Multilateral Competent Authority Agreement on exchanging GloBE information was opened for signature in 2025, following the release of the GIR framework. This reduces the room for inconsistent local narratives and increases the importance of globally consistent data ownership and compliance processes.

At the same time, the European Commission is already linking Pillar Two to a broader 2026 simplification agenda. In its February 2026 consultation, it observed that current rules create “overlaps, risks of double taxation, excessive administrative burdens, legal uncertainty and fragmentation due to divergent national implementation.” It also stated a policy goal of reducing administrative burden by at least 25% for all businesses and 35% for SMEs until 2029. This policy context matters because groups are now assessing restructuring not only through the lens of tax cost, but also through the lens of compliance efficiency.

BEFIT remains relevant as a future overlay in this discussion. The Commission has stated that these new rules “could reduce tax compliance costs for businesses operating in the EU by up to 65%” and would apply mandatorily to groups meeting the familiar €750 million revenue threshold and a 75% ownership threshold. Even though BEFIT is separate from Pillar Two, the same threshold logic encourages groups near or above €750 million to review perimeter questions, legal structure and reporting systems together rather than in disconnected workstreams.

A practical roadmap for 2026 adaptation

For many groups, the immediate workstreams are now relatively clear. First, identify where QDMTTs arise and how they interact with the group’s existing legal and operational footprint. Secondly, determine where IIR and UTPR exposure could arise after taking account of domestic minimum taxes, transitional deferrals and any relevant Article 50 election. Thirdly, test whether current ownership chains and entity locations still support the intended tax and governance outcome.

Fourthly, prepare for the 30 June 2026 filing by centralising data, clarifying internal responsibilities and taking advantage of DAC9 wherever possible. The designation of the calculation and filing function should be addressed expressly, with a documented rationale and appropriate operational resources. Fifthly, reassess safe-harbour eligibility in light of the OECD’s 5 January 2026 package. For some groups, transitional simplifications may justify a measured approach; for others, they may simply provide breathing space while a more fundamental redesign is executed.

Finally, groups should monitor the EU simplification agenda and the likely interaction between minimum tax, administrative cooperation and future harmonisation proposals. Tax authorities are unlikely to be indifferent where restructuring appears designed merely to divert top-up tax away from domestic jurisdictions, especially given EU modelling that suggests material revenue gains from the Directive. A robust adaptation strategy must therefore combine legal substance, operational coherence and credible compliance design.

The present phase of reform rewards disciplined simplification rather than reactive movement. The right response will differ from one group to another, but the core question is now common: does the existing structure still make sense when QDMTT, IIR, UTPR, DAC9 reporting and OECD safe harbours are considered together? Where the answer is uncertain, a structured legal and tax review is now essential.

For corporate groups, executives and investors, adapting group structures to new domestic and EU minimum-tax rules should be viewed as a strategic exercise at the intersection of tax law, governance and cross-border operations. Those who act early can reduce reporting friction, manage controversy risk and preserve flexibility for the next stage of EU tax reform. Those who delay may find that legacy structures are not only inefficient, but increasingly difficult to defend.