Ability to Allocate Pillar Two Top-up Tax to Parent Payer

Tax Reporting now allows automated allocation of Pillar Two Qualified Income Inclusion Rule (IIR) Top -Up Tax to the paying entity. With this enhancement, the IIR applies in respect to the remaining low-taxed profits and can be applied to either the Ultimate Parent Entity (UPE) of the MNE Group or an Intermediate Parent Entity (IPE) in the ownership chain in line with a top-down approach.

Business Benefit: This new capability allows applications to automatically move applicable Pillar Two Top-Up Tax from low-taxed entity to the IIR paying entity.  The movement of this data impacts current tax expense and flows through the recording in the Tax Account Roll Forward (TAR) for inclusion in the journal entry.

Steps to enable and configure

To enable this feature, go to the Tax Reporting - Enable Features screen and select Qualified Parent and Entity Top Tax Allocation under Pillar Two (Global and Local Top-up Tax). Click Enable.

Key resources

• Allocating Pillar Two Top Up Tax to Parent Payer in Administering Tax Reporting