As OECD’s Pillar Two global minimum tax framework continues to roll out across jurisdictions, I have no doubt companies are facing growing pressure to ensure they ensure strategic readiness in the case of implementation. With its complexity and vast global reach, the Pillar Two Tax regime requires far more than just manual calculations and spreadsheets. It calls for intelligent technology integration across tax functions.
Here are four practical ways I believe businesses can leverage technology to ensure they stay ahead of the Pillar two rules.
Firstly, of course one of the more obvious ways businesses can implement technology. (which I’m sure many of you already know) The implementation of Pillar 2 ready Tax Engines. These are vital in signalling a strategic shift in how companies approach internation taxation and are fairly easy to implement, yet very effective. The tax engines could approach the following:
Secondly, and perhaps another more obvious technical example, is the use of Dashboards and analytics to monitor effective tax rates. I am no hater to a simple dashboard, whilst I fully endorse the effectiveness of complex technical systems, a dashboard is a critical representation of data all companies should be using.
My next 2 examples, are based more on the implementation of Blockchain technology. So, if you aren’t too familiar with Blockchain technology I would advise you visit one of my other articles explaining its practical use in the field of tax.
As multinational enterprises (MNEs) face increasing pressure to maintain consistent compliance across diverse jurisdictions, decentralized platforms offer a groundbreaking solution. By leveraging blockchain-based compliance portals, companies can require each subsidiary , even those operating in high-risk or low-transparency countries , to securely upload standardized financial and tax data into a shared, tamper-proof environment. Integrating advanced techniques like zero-knowledge proofs further enhances the model, allowing subsidiaries to validate compliance without revealing sensitive financial details to every participant in the network. This innovation not only strengthens the integrity of Pillar Two reporting but also addresses critical challenges around data privacy, regulatory distrust, and geopolitical risk.
As Pillar Two introduces complex jurisdiction-level tax calculations, the risk of oversight or misreporting grows. AI-powered anomaly detection offers a proactive solution by scanning large volumes of financial and tax data to identify unusual trends, unexpected deviations in jurisdictional effective tax rates (ETRs), or early signals of non-compliance. Companies can train machine learning models on historical tax data, enabling them to detect subtle patterns that might be missed manually. These models can also simulate how structural changes , such as entity restructuring, acquisitions, or shifting IP , would impact future compliance. By surfacing anomalies before they become liabilities, AI adds a powerful layer of foresight to Pillar Two compliance strategies.