Pillar Two
Pillar Two is part of the BEPS 2.0 international tax reforms agreed by roughly 140 jurisdictions. It establishes a 15% minimum effective tax rate for multinational groups with consolidated annual revenue of at least €750 million.
This is not simply a statutory tax rate. The effective rate is calculated jurisdiction by jurisdiction. For a large multinational, that can mean well over a hundred separate computations, each dependent on consistent entity-level financial and tax data.
How the mechanism works
If income is taxed below 15% in a jurisdiction—for example, at an effective rate of 9%—the framework is designed to collect the six-percentage-point shortfall through three interlocking rules.
Income Inclusion Rule: the parent jurisdiction taxes the shortfall arising in foreign subsidiaries.
Undertaxed Profits Rule: a backstop that allows other jurisdictions to deny deductions or impose an equivalent adjustment when the IIR does not collect the amount.
Qualified Domestic Minimum Top-up Tax: enables the low-tax jurisdiction to collect the top-up itself before another country does.
Pillar Two is a tax rule delivered through operational data.
The calculation requires granular information on deferred tax, payroll, tangible assets and entity-level results. That information is dependable only when ERP structures, charts of accounts, intercompany processes and entity reporting are governed consistently. GBS is therefore not merely supplying data to tax; it is part of the control environment on which the calculation relies.
CSRD
CSRD is the European Union’s sustainability-reporting framework and the successor to the Non-Financial Reporting Directive. It requires in-scope companies to report against the European Sustainability Reporting Standards, with assurance over the disclosures.
It reaches far more companies than the previous regime, including qualifying non-EU groups with a significant EU presence.
Reporting requirements are being introduced by company category rather than through a single commencement date.
Companies consider both the financial effect of sustainability matters and their impact on people and the environment.
Required information can include Scope 1, 2 and 3 emissions, workforce measures, governance and biodiversity data.
The practical challenge is not drafting the sustainability report. It is producing complete, traceable data across the enterprise and its value chain—with a level of control that supports external assurance.
Much of the sustainability evidence begins as a transaction.
Procurement categories, travel and expense, energy invoices, supplier records and payment data already pass through GBS processes. If sustainability teams reconstruct this information through periodic surveys, the result is costly, difficult to reconcile and hard to assure. If GBS captures the relevant attributes during AP, T&E and procurement processing, reporting becomes a governed by-product of operations.
The Green Ledger proposal
A Green Ledger is not a separate sustainability database sitting beside finance. It is a controlled extension of the transaction record: financial entries are enriched with the sustainability attributes needed for reporting, reconciliation and assurance.
For GBS, this means designing data capture into the normal flow of work—supplier classification, emissions factors, travel type, energy source and evidence ownership—so that sustainability information can be traced back to the underlying transaction. The result is faster reporting, lower assurance effort and materially stronger confidence in the numbers.
Draft editorial note: Regulatory scope, effective dates and transition provisions can change. Final publication should be reviewed against current OECD and EU guidance and the organisation’s specific facts.