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ARTICLE · 01 JUNE 2026

Challenges To Pillar 2 And The Tax Control Framework

GGI | Global Alliance
GGI | Global Alliance
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The European Union's Pillar 2 tax framework imposes a minimum 15% effective tax rate on multinational groups with consolidated turnover exceeding EUR 750 million. This comprehensive analysis explores how organizations must adapt their tax control frameworks to meet the complex requirements of the Global Anti-Base Erosion rules, including enhanced governance, adjusted reporting processes, and international coordination mechanisms.

NetherlandsTax
Linda Schuurmans (Vardi, Brukner, Ingber, Rozenzvieg CPA)
Linda Schuurmans (Vardi, Brukner, Ingber, Rozenzvieg CPA)
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The European Union’s Pillar 2 tax framework legislation applies to groups with a consolidated turnover of at least EUR 750 million, and is not limited to international groups. If a domestic group achieves the threshold of EUR 750 million in consolidated turnover, Pillar 2 applies to that group as well. 

The idea stems from the belief that unfair tax competition and a “race to the bottom” must be prevented. For this reason, and as part of its broader “base erosion and profit shifting” project, the Organisation for Economic Cooperation and Development OECD proposed a scheme in 2021 to ensure that internationally operating groups paid an effective minimum tax rate of 15% on their profits. Following the OECD’s lead, the EU adopted this approach and embedded it in the EU Anti-Tax Avoidance Directive (ATAD), Directive 2022/2523, which EU member states are required to adopt into national law.

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