By Sandy Pfeffer

In a recent global survey of finance leaders regarding tax strategy, 70% of respondents expect an increase in public reporting on tax. This transparency was the top issue cited, and many noted that public country-by-country (CbC) reporting is expected to drive it.

This cross-border reporting may seem like an esoteric issue. However, the Chamber of Commerce of Greater Philadelphia identified at least 2,300 companies in the Greater Philadelphia area¹ with an international presence, according to an analysis of 2024 Lightcast data.

There is one more filter: due to the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two, tax transparency via CbC reporting is relevant to global entities with consolidated revenues at or exceeding 750 million euros. Implementation is already underway, so, now is the time for thoughtful adaptation across talent, technology, and data.

Pillar Two: Where Are We Now?

The OECD’s Pillar Two is international tax reform that introduces a global minimum tax rate of 15%. More than 135 countries and jurisdictions have agreed to the Pillar Two framework. Given its status (or current lack of) in the United States, it may feel distant; yet, it is a reality for all in-scope companies operating in the places where it has become law. The first information returns to report Global Anti-Base Erosion (GloBE) calculations are expected to be due in June 2026.

How to Get There from Here

A company’s finance team has three resources along the path to compliance: talent, technology, and data. Since Pillar Two is based on GloBE income, which is generally derived from book income rather than taxable income, it requires adjustments outside of other income tax or financial reporting. This, in turn, involves extensive coordination among a host of internal teams to set up systems to collect the required data.

If a fragmented technology landscape is the starting place, then enterprise resource planning with multidisciplinary team collaboration and awareness of organizationwide data sources is a logical next step. But it may raise the question of efficiency.

The answer may lie in major technology advancements ahead. The same survey notes that there is a sense of moderate progress toward digitization, and 66% of respondents expect Generative AI (GenAI) to be widely used in the next three years (guided by significant human oversight). Again, talent — the human aspect — is tied closely to the ability to wrangle data and technology and efficiently address not just Pillar Two but the greater issue of tax transparency and digitization.

I spent time with Adam Roth, Philadelphia tax managing partner with Deloitte Tax LLP, to better understand the considerations. He shared five points his team uses to summarize planning:

• Scope of Pillar Two: Understand whether your entity will be in-scope, based on your current footprint and revenues.
• People and processes: Cross-functional involvement of finance and accounting, tax, technology, and others will be critical to ensure readiness and compliance.
• Technology and data: Businesses must compile volumes of new data for Pillar Two compliance and ensure availability, reliability, and integration of key data.
• Tax planning and accounting implications: Thoughtful consideration should be given to Pillar Two compliance requirements and the alignment of tax planning with the accounting framework.
• Stakeholder communication: Companies need to manage internal and external stakeholder communication regarding future Pillar Two impacts.

About a year ago, I shared thoughts on the value of refreshing an organization’s data strategy in a PICPA CPA Now blog post, noting that data supports numerous opportunities. That view may have driven general agreement in theory, but perhaps not enough of a drive to make it a reality. Compliance with tax standards, however, provides some reality.

In the survey, about half of North American respondents felt that Pillar Two might lead to less complexity. Looking ahead to future advancements, data management and opportunities with GenAI may seem complex, but when led by strategic human guidance, the downstream view is a hopeful one. Digitization of tax is likely part of a long-term outlook, one in which a modernized process reduces complexity and readily provides insights that are valuable across the organization. Addressing Pillar Two now is essential given regulatory deadlines, and it may jumpstart that journey toward efficiency and effectiveness.

¹ The Greater Philadelphia Chamber of Commerce has defined the Greater Philadelphia area as 11 counties across three states: Philadelphia, Delaware, Chester, Montgomery, and Bucks in Pennsylvania; Mercer, Burlington, Camden, Gloucester, and Salem in New Jersey; and New Castle in Delaware.

Sandy Pfeffer is the Greater Philadelphia marketplace leader for Deloitte LLP. Pfeffer is a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants and is a certified public accountant licensed to practice in Pennsylvania and New Jersey. She can be reached at spfeffer@deloitte.com.

^{This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this article.}

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