Key theme : Common Misconceptions of BEPS 2.0 Pillar Two
The OECD introduced BEPS 2.0 Pillar Two to reduce profit shifting by multinational enterprise (“MNE”) groups to low-tax jurisdictions. The framework establishes a global minimum effective tax rate (“ETR”) of 15% and requires groups to pay additional tax, known as Top-up Tax, where the jurisdictional ETR falls below 15%.
Pillar Two does not apply to every business. Only MNE groups with a group consolidated annual revenue of at least €750 million in at least two of the four preceding fiscal years fall within scope. While the threshold appears straightforward, the underlying GloBE Rules are considerably more complex. From our experience, many groups misunderstand key aspects of the regime, for instance:
Misconception 1: A statutory tax rate above 15% means Pillar Two does not apply?
Many in-scope MNE groups assume that operating in a jurisdiction with a statutory corporate income tax rate (“CIT”) of 15% or more automatically protects them from Pillar Two. It could not be applied in every case. The rules require calculation of a GloBE ETR by comparing Adjusted Covered Taxes (“ACT”) against GloBE Income. Various adjustments including deferred tax, timing differences, and excluded income which can reduce the ETR below 15% even where the statutory CIT rate exceeds that level. An in-scope entity in Thailand without any CIT incentive has a higher chance to meet the 15% threshold. However, a jurisdiction’s Pillar Two position must be assessed under the GloBE Rules, not by reference to local CIT rate alone.
Misconception 2: Deferred tax is not required under local accounting standards, so it is not required for Pillar Two?
The in-scope entities in Thailand which apply Non-Publicly Accountable Entities (“NPAE”) may not require to set up deferred tax based on the Thai Financial Reporting Standards (“TFRS”).
However, Pillar Two operates differently. Deferred tax is a key component of ACT and must be calculated for GloBE purposes regardless of local accounting requirements. For groups that have not previously maintained deferred tax records, gathering the necessary data and establishing an appropriate process can be challenging.
Misconception 3: Pillar Two only affects foreign-headquartered groups
Pillar Two applies based on the consolidated revenue of the MNE group as a whole, not the location of its parent. A Thai-headquartered MNE group with international operations may be subject to the rules in the same way as a foreign-parented group which the threshold test makes no distinction between the two.
Thai subsidiaries of foreign MNE groups should also take note that while the top-up tax liability is determined at the group level, Thai entities within an in-scope group will often be required to provide financial data, deferred tax computations, and other information to support the group’s GloBE compliance, placing real demands on local finance and tax teams.
Misconception 4: Qualifying for Safe Harbour solves the problem but it is not a permanent solution
The Transitional CbCR Safe Harbour can significantly reduce compliance burden, but it is only a temporary measure. For fiscal years beginning on or before 31 December 2027 which received a one-year extension under the OECD’s Side-by-Side agreement from the original deadline of 31 December 2026 that eligible jurisdictions may rely on three safe harbour tests instead of performing full GloBE calculations.
Once the transitional period ends, full GloBE computations will generally be required. Groups that use this period to build robust data collection, deferred tax, and compliance processes will be better prepared.
Misconception 5: CbCR ETR and GloBE ETR are the same
Both metrics measure tax outcomes but are calculated differently. The simplified ETR used for Safe Harbour purposes relies primarily on CbCR data, whereas the GloBE ETR incorporates additional adjustments including deferred tax and other GloBE-specific rules. Passing a Safe Harbour test does not confirm that the jurisdiction’s full GloBE ETR will remain above 15%.
Conclusion
Pillar Two is far more than a simple 15% minimum tax. Understanding the differences between statutory tax rates, GloBE ETR calculations, deferred tax requirements, and Safe Harbour rules are essential for effective compliance.
As we advise many MNE groups from identifying an in-scope entities, Transitional CbCR Safe Harbour assessment and Top-up Tax calculation, we observe that groups that begin preparing early will be better positioned to manage future obligations and reduce the risk of unexpected tax exposures.
While the internal accounting team may have more capacity than the closing year end period, we advise in-scope groups to think about the Pillar 2 issue for the remainder of 2026.
How can we help?
Forvis Mazars team has dedicated Pillar Two specialists both locally and globally to support the MNE Group in meeting their compliance obligations.
Contact – Forvis Mazars Thailand
Parin Supsavaipol (Tax Director) – [email protected]
Recent updates : Pillar Two Thailand join GIR MCAA framework
On 15 September 2026, the Thai Revenue Department announced that Thailand has joined the Multilateral Competent Authority Agreement on the Exchange of GloBE Information Return (“GIR MCAA”).
The GloBE Information Return (“GIR”) is a mandatory filing submitted to the tax authority in each jurisdiction where an MNE group operates. It provides detailed information of the group, including its ultimate parent entity and constituent entities, the entities exempt from or liable for Top-up Tax, and the methodology used to calculate the tax.
Thailand’s participation in the GIR MCAA is expected to provide relief for foreign MNE groups that have constituent entities in Thailand where the GIR is filed in a jurisdiction that is also a member of the GIR MCAA framework. This development is intended to facilitate the exchange of GIR information between participating jurisdictions and may reduce potential local GIR filing requirements in certain circumstances.
