The OECD's Base Erosion and Profit Shifting (BEPS) 2.0 initiative represents a significant change in global tax standards. Its goal is to combat tax avoidance by multinational corporations.
BEPS 2.0 consists of two pillars that focus on different aspects of taxation whereas the focus lies on Pillar 2 (Global Minimum Tax).
Scenario planning: Responding to new BEPS proposals– built on KPMG Digital Gateway
Pillar 1 focuses on the redistribution of taxing rights - apart from the standardization of profit margins. Countries with large consumer markets should have the right to tax the profits of large multinationals, even if they are not physically present in those countries. This will ensure that digital and global companies are taxed fairly. However, countries have not yet been able to reach a final agreement on its introduction.
Pillar 2 introduces a global minimum tax rate of 15%. This global minimum tax is intended to prevent multinational corporations from shifting profits to low-tax jurisdictions. This regulation mainly affects groups with an annual consolidated turnover of more than EUR 750 million and has also been implemented in Switzerland from 2024 (Domestic Minimum Top-up Tax followed by the Income Inclusion Rule as from 2025).
Companies below this threshold should nevertheless review their ownership structure as they may be part of a larger consolidated group (e.g. family office, foundation). The global minimum taxation will have a lasting impact on the tax strategy of multinational groups.
The introduction of Pillar 2 has a significant impact on the Swiss tax system.
Traditionally characterized by attractive corporate tax rates, Switzerland now faces the challenge of applying the new global minimum tax standard. Hence, the tax burden of traditionally low tax cantons is basically lifted up to 15% as in other countries.
However, a fair and internationally harmonized tax system will not only strengthen Switzerland's reputation as a responsible country but will also promote a sustainable tax landscape in the long term.
The Swiss authorities are still actively working to assess the impact of the Pillar 2 rules and to ensure that Switzerland remains competitive while meeting international requirements. In this connection, existing tax incentives can still be used in a tax efficient manner under the Pillar 2 rules as a Qualified Tax Incentive. Furthermore, some cantons have introduced new incentive systems (grants or Qualified Refundable Tax Credits) or are in the course of doing so.
Companies need to be prepared for a possible adjustment of profit tax burden and incentive possibilities, which will affect both local and international companies.
The adaptation to Pillar 2 poses a number of challenges for the companies:
Pillar 2 applies to multinational companies in all sectors, including technology, pharmaceuticals and consumer goods, that meet the size criteria.
Companies with extensive international operations need to ensure that they meet the new compliance and reporting requirements. This may require adjustments to accounting and IT systems. In addition, increased tax burdens may affect companies that previously benefited from lower tax rates.
Companies also need to ensure that their governance framework meets the new legal requirements.
Switzerland has already taken significant steps to meet the OECD timetable for the introduction of a global minimum tax.
The Pillar 2 concept is supported by more than 130 countries worldwide.
Besides Switzerland, a large number of countries (in particular most of the EU countries) have introduced at least one of the corresponding minimum taxation rules. An overview of the current implementation status can be found on the KPMG BEPS 2.0 Tracker.
While some large countries, such as China and India have not yet decided on implementation steps, the US have been granted a Side-by-Side System as from 2026 whereas companies of a US parented group are exempted from two of the corresponding minimum taxation rules whereas they are still subject to Domestic Minimum Top-up Taxes where introduced.
Nevertheless, most companies are affected by the rules in at least one country from 2024 or 2025 at the latest and will need to file the first Pillar 2 tax return by end of June 2026.
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Under Pillar 2, Swiss companies will need to manage many data points to comply with the rules.
Approximately 150 different data points need to be collected, including information on taxes, income and internal structures.
Companies are faced with the decision to either develop their own calculation system, license external software solutions, or outsource the calculation and/or compliance.
KPMG has a proven mapping approach that can be used to map the GloBE rules to the data available in your organization.
Our team of experts is experienced in guiding groups through the implementation process from data gathering until filing.
We’re ready to support your Pillar Two project through an approach that:
KPMG Switzerland’s Pillar Two News provides updates on key developments in the OECD/G20 global minimum taxation (Pillar Two), covering Swiss regulations as well as international changes relevant to Swiss-headquartered groups.
