Preparing for Pillar Two

Top-up tax calculation

You should consider the steps below when you are preparing your top-up tax calculation:

  1. Determine the qualifying income or loss of each entity in the group.
  2. Identify the covered taxes, and adjusted covered taxes, for each entity in the group.
  3. Calculate the jurisdictional effective tax rate (ETR) for Pillar Two entities.
  4. Consider how the substance-based income exclusion may impact any jurisdictional qualifying income and top-up tax.
  5. Identify the Pillar Two top-up taxes each entity may be liable for.
  6. Identify the filing entity for each top-up tax.  

Next: Pillar Two registration

Published: 29 July 2026 Print this page

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