Global Minimum Tax (GMT) and the data dilemma
As we move through 2025, the Global Minimum Tax regime—also known as GloBE or OECD BEPS 2.0 Pillar 2—has become firmly established in the global tax landscape. What began with South Korea’s pioneering implementation has now expanded across the globe, with most of the 137 signatory countries having enacted domestic legislation to enforce the 15% minimum tax rate. For the 10,000 multinational companies affected worldwide, Global Minimum Tax compliance is no longer a future concern but a present reality requiring sophisticated data management and reporting capabilities.
Global Minimum Tax rules will force companies to collect, analyse, and report on more data than ever before. The regulation aims to make it harder for big companies (those with $750M€ in revenues in the Consolidated Financial Statements of the Ultimate Parent Entity) to avoid tax by shifting profits to lower tax jurisdictions.
However, the regulations (which are still being formalised in national laws by many countries) will throw up numerous compliance challenges. For many, the most daunting challenge will be the required reporting of data for Global Minimum Tax. The new legislation requires companies to widen the scope of data collected across the organisation, including the addition of organisational data (e.g., stock compensation, pension expenses) and includes data related to Pillar 2 (e.g., elections and carry -forwards). As focus on transformation heightens to support mitigating risks and increase efficiencies, data management matters more than ever.
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What is Global Minimum Tax (GMT)?
Solutions for Global Minimum Tax data management
What is Global Minimum Tax (GMT)?
- Global Minimum Tax is a minimum rate of tax on corporate income that is internationally agreed upon and accepted by individual jurisdictions. Each country would be eligible to a share of revenue generated by the tax.
- It is being spearheaded by the Organisation for Economic Cooperation and Development (OECD) and seeks to avoid a ‘race to the bottom’ in national tax rate terms. In essence, the aim is to deter multinationals from shifting tax revenues to countries with lower tax rates. Major economies want to make sure that corporate income is taxed in countries where companies generate revenue, but do not have a physical presence – an issue that has been exacerbated in recent years by the digitalisation of the world’s economy.
- If your company has an international reach and revenues of more than €750million, this involves paying a ‘top-up’ tax, if income generated in any jurisdiction where the multinational enterprise (MNE) has operations are taxed below the global minimum tax rate. If it has more than €20billion in revenues, new rules could also change where taxes are paid, by reallocating a share of profits above a 10% profit margin.
Why is data such a big deal?
- Digitalisation has had another important impact on the way businesses are run and how tax is collected: it has increased the emphasis on data. As tax professionals are only too aware, pressure is high to supply internal company leadership with timely, accurate, and detailed financial and tax data. Governments are putting more pressure on tax departments and companies for transparency as well.
- Now, as the Global Minimum Tax regime aligns global corporate taxation, it will further intensify expectations on tax teams, requiring them to provide unprecedented global transparency and ramp up reporting requirements. All of which are underpinned by data.
- Global Minimum Tax also touches on a variety of tax rules (book tax, cash tax, cross-border and local country rules) for which data may be disparate and in different formats (e.g. spreadsheets, email, ERP systems). Tax reform is seen by senior tax professionals as a top number one challenge their departments are facing today, according to the 2024 Thomson Reuters State of the Corporate Tax Department report. Global Minimum Tax is a good example of the tremendous challenge reform can present for international tax planning.
Managing more and more global tax data
The reality is that complying with the new rules will mean data needs to be gathered more frequently (if not continuously), from more areas of the business, in more granular detail, more quickly, so that tax calculations and filings can be done more regularly.
As the OECD continues to publish detailed guidance around the Pillar 2 implementation framework (addressing the long awaited guidance on safe harbor exemptions mostly based on CbC data, ordering rules between qualified domestic top up tax (QDMTT), subpart F/GILTI and other Pillar 2 taxes) the significance of the data challenges and the need for an automated system that can collect data across the globe from a host of disparate systems and different stakeholders become a lot more acute.
For a U.S. Multinational Enterprise (MNE), Pillar 2 requires a carefully coordinated data gathering and calculation of the global tax provision, along with the U.S. calculations of foreign source income (subpart F, GILIT, FTCs), CbC reporting amounts and Pillar 2 taxes, with inputs and calculated values having to be passed back and forth between the various calculation engines.
These requirements must be fulfilled during each quarter’s tax provision calculation, updated at the time of each country’s tax return preparation and submission, and leveraged for the preparation and submission of information returns for country-by-country reporting and Globe Information Returns. Additionally, compliance with the forthcoming STTR rules will be required.
Use a single source of truth for tax data
Foundational to achieving proper data governance is centralising data from disparate systems and formats to create a single source of truth of tax data for use across solutions. A centralised data warehouse, like ONESOURCE Data Hub for example, will reduce the volume of hours spent preparing data and searching for accurate tax data across multiple applications and give more time to tax professionals to analyse and think strategically about complicated issues, like the impacts of Global Minimum Tax.
Data that is ready for use in Global Minimum Tax analysis should come from a “single source of truth” where all data is contained in one dataset that reports and disclosures (internal or external) are based on data that is fit-for-purpose: consistent, comprehensive, accurate and up-to-date.
Solutions for Global Minimum Tax data management
To overcome these tasks, specialised calculation engines are critical. Thomson Reuters Orbitax Global Minimum Tax provides sophisticated calculation capabilities and workflow automation needed. It allows tax professionals to model various scenarios, calculate ETRs and top-up taxes under GloBE rules, manage elections, and prepare data for GIRs.
Its integration with solutions like ONESOURCE Tax Provision is vital, enabling MNEs to accurately reflect the financial statement impact of Global Minimum Tax in their quarterly and annual reporting. The true power in navigating Global Minimum Tax in 2025 lies in an integrated technology ecosystem. Thomson Reuters ONESOURCE offers a suite of solutions that work together:
- ONESOURCE Data Flow: Establishes the reliable data foundation.
- ONESOURCE BEPS Pillar Two: Performs the complex GloBE calculations and scenario modeling.
- ONESOURCE Tax Provision: Accurately incorporates GloBE impacts into financial reporting.
- ONESOURCE Global Tax Compliance: Manages local country direct tax compliance, including the eventual incorporation of GIR filing functionalities where appropriate.
This connected approach automates and standardises workflows, minimising errors and freeing up highly skilled tax professionals to focus on strategic analysis, risk mitigation, and advising the business on the evolving implications of global tax changes.
That’s why it makes sense to deploy sophisticated technology tools, like Orbitax Global Minimum Tax to automate and standardise workflows and bring clarity to the impact of Global Minimum Tax.
Find out more on how tax technology can help companies meet their global minimum tax requirements.
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Automate Pillar 2 Global Minimum Tax calculations with an integrated platform |