As domestic Pillar Two implementations and multilateral reporting processes have come into force, international owners of holding structures face a new landscape of top-up taxes, information returns and potential adjustments to cross-border allocation of taxing rights. Acting now to assess exposure, adjust legal and economic arrangements, and prepare for robust reporting will materially reduce the risk of unexpected top-up liabilities or administrative penalties.

The practical steps below reflect the current state of play in the Global Anti-Base Erosion (GloBE) / Pillar Two regime and related domestic rules across major jurisdictions as of 17 September 2026, and are intended for boards, group CFOs, tax directors and family-office principals considering structural and reporting changes. Where relevant, we reference recent guidance and implementation developments to illustrate compliance timelines and choices.

Assess exposure to the global minimum tax

Begin with a quantitative scoping exercise to identify which entities fall within the aggregated MNE group threshold and which jurisdictions host low effective tax rates: Pillar Two’s GloBE rules generally apply to MNE groups above the revenue threshold and impose top-up taxation where a jurisdictional effective tax rate falls below the agreed minimum.

The assessment must combine financial data (jurisdictional profit and tax metrics), fiscal year boundaries, and an inventory of permanent establishments and holding companies. Many jurisdictions measure effective tax rates on a jurisdictional basis and apply the Income Inclusion Rule (IIR) or Undertaxed Profits Rule (UTPR) as appropriate.

Document assumptions, determine potential top-up amounts under different methodologies, and map which parent or filing constituent entity could bear an IIR liability, this mapping will drive subsequent choices about where to strengthen substance, allocate financing, or consider elections such as Qualified Domestic Minimum Top-up Taxes (QDMTTs).

Review and adapt holding-company substance

Holding entities with limited people, premises and activities are at greatest risk of being treated as base-eroding conduits. Strengthening demonstrable economic substance, board minutes, locally exercised management, genuine business activities and employment, reduces transfer-pricing and substance-based challenges in audits and supports commercial positions under domestic anti-avoidance rules.

Where practical, consider upgrading the operational footprint of a holding company: relocate key governance meetings, relocate senior decision‑makers, introduce real commercial contracts and host demonstrable oversight of group investments. Any substance upgrades should be economically justified and documented contemporaneously to withstand tax authority scrutiny.

Be cautious about artificial or last-minute restructurings designed solely to avoid Pillar Two exposures. Tax authorities and the OECD’s implementation guidance expect substance to reflect real economic activity rather than technical paper reorganisations.

Re-evaluate financing, intragroup charges and transfer pricing

Intragroup financing and management fees are frequent drivers of low-taxed profits in holding jurisdictions. Reconsider the pricing, contractual terms and allocation of interest and service costs so that they reflect arm’s‑length outcomes and align with the group’s operational reality.

Where interest deductions or royalty payments have historically been shifted to low‑tax holding locations, quantify the Pillar Two top-up effect and determine whether alternative arrangements (e.g., relocating finance to a higher-tax jurisdiction, converting loans to equity) would be more cost‑effective once possible top-up liabilities are included.

Any changes to transfer-pricing policies should be accompanied by contemporaneous benchmarking studies and transfer-pricing documentation that address both domestic audit risk and Pillar Two calculations, including the jurisdictional blended effective tax rate and the allocation of income.

Prepare for GloBE information reporting and data governance

Robust data systems are now essential: the GloBE Information Return (GIR) and related notices require consistent jurisdictional profit, tax and permanence data, and many jurisdictions mandate electronic filing portals with strict deadlines. Jurisdictions implementing the GIR have coordinated approaches to central filing and exchanges to support compliance.

In France and other implementing states, new notification and GIR forms have specific filing timelines and signature requirements; for example, French guidance sets out notification and GIR filing rules and deadlines tied to the fiscal year end. Ensure your accounting, tax and legal teams can deliver the required schedules within the statutory windows.

Invest in an internal control framework for GloBE reporting: designate clear data owners, reconcile GIR data to statutory and consolidated accounts, maintain audit trails for key judgments, and test electronic filing processes a of first deadlines to avoid operational failures and penalties.

Consider QDMTT elections and domestic top-up options

Where available, a Qualified Domestic Minimum Top-up Tax (QDMTT) can simplify compliance by applying a domestic top-up tax rather than relying on an IIR or UTPR from other jurisdictions. Evaluate whether jurisdictions where you operate offer a QDMTT, the practical effect on cash taxes, and whether elections or registrations are required.

For groups with entities in jurisdictions that implemented Pillar Two via the EU Directive, review whether local elections, transitional arrangements or deferrals apply and how these interact with the group’s filing position. Some EU Member States used permitted deferrals or partial implementations, the practical effect on a group’s effective tax charge can be material.

Where a QDMTT is not available or attractive, quantify how an IIR or UTPR application would flow through the group, and factor those potential top-up charges into capital structure and liquidity planning.

Monitor country-specific developments, treaty and policy changes

Implementation remains uneven across jurisdictions and political developments, notably, the U.S. position evolved into a ‘side‑by‑side’ approach that may exempt certain U.S.-parented groups from IIR/UTPR application, changing comparative outcomes for U.S.-ed versus non‑U.S. groups. Track these policy changes because they may affect where top-up tax is triggered and who bears it.

Maintain a jurisdiction tracker for each holding location that records the domestic law implementation date, available safe harbours, filing portals, bilateral exchange readiness and any treaty developments such as Subject-to-Tax-Rule (STTR) instruments that may affect group outcomes. This live register will support timely decisions on restructurings, elections and disputed items.

Engage local counsel and tax advisors in jurisdictions where the group has material exposure; local interpretations of filing procedures, allowed deductions and anti‑avoidance measures can differ and will materially affect the optimal structural response.

Strengthen documentation, audit readiness and dispute strategy

Expect increased scrutiny from tax administrations and prepare contemporaneous documentation that reconciles commercial decisions with tax outcomes and Pillar Two calculations. Good documentation reduces the risk of reassessment and supports a credible defence in administrative review or litigation.

Develop a dispute-resolution playbook that addresses likely audit issues, valuation of intangible transfers, the allocation of profits to jurisdictions, the treatment of fiscally transparent entities, and intercompany financing assumptions, and set aside contingency reserves where appropriate.

Where significant exposures are identified, consider advance engagement with tax authorities (e.g., rulings, pre-filing consultations) to obtain certainty on complex issues; this can be particularly valuable for novel positions under the GloBE rules and for groups with unusual fiscal year structures or mixed jurisdictional footprints.

Coordinate tax, treasury and corporate governance responses

Shoring up holding structures is not purely a tax exercise: treasury policies, corporate governance and investor reporting must align. Update board reporting to include quantified Pillar Two exposures, expected cash‑tax timing, and proposed mitigation measures so that governance decisions reflect the total economic cost of alternatives.

Coordinate treasury decisions, intercompany loan sourcing, hedging, dividend policies, with tax modelling so that funding choices do not inadvertently increase effective low‑tax profits in targeted jurisdictions. Cash management must now include projected top-up tax outflows and exchange timelines for GIR data.

Finally, ensure tax-risk communication is consistent with investor disclosures and that any material tax-policy changes are integrated into refinancing, M&A and capital‑allocation planning.

Implementing these steps will require a cross-disciplinary programme: legal counsel for entity-level changes, tax specialists for modelling and reporting, treasury for liquidity and funding changes, and IT for data and filing automation. Early, documented action reduces audit risk and preserves strategic optionality.

Given the evolving nature of Pillar Two implementation and country-specific filings and elections, international owners should commission a tailored diagnostic now. Engage experienced advisers to run a focused project that produces (i) quantified exposures, (ii) a ranked list of remediation options with commercial and tax pros/cons, and (iii) a compliant reporting timetable tied to each fiscal year and jurisdictional filing requirement.