Pillar Two GloBE Information Return: What UK CFOs Must File Now

Pillar Two’s first GloBE Information Return deadline is 30 June 2026: UK multinationals with annual consolidated revenues above €750 million must now file their jurisdiction-by-jurisdiction tax position under the global minimum tax rules — or face HMRC penalties under the Finance (No.2) Act 2023.

What Is the GloBE Information Return and Who Must File?

The GloBE Information Return (GIR) is the standardised reporting document required under the OECD’s Pillar Two Global Anti-Base Erosion (GloBE) rules, implemented in the UK as the Multinational Top-up Tax (MTT) and Domestic Top-up Tax (DTT) from 31 December 2023. The obligation applies to multinational enterprise (MNE) groups with annual consolidated global revenues of at least €750 million in at least two of the prior four fiscal years.

For calendar-year groups — the majority of large UK multinationals — the first GIR covering fiscal year 2024 fell due on 30 June 2026, 18 months after the year end. HMRC has confirmed that penalties apply for late or incomplete filings, and the GIR must be submitted to the primary filing entity’s jurisdiction, with that jurisdiction responsible for sharing data with other signatories to the Multilateral Competent Authority Agreement (MCAA) on the GIR.

According to EY’s 2026 global tax survey, fewer than 45% of in-scope multinationals had completed their GIR data collection processes as of April 2026 — a striking figure given the scale of the compliance requirement. The GIR encompasses more than 300 data fields per constituent entity, covering effective tax rates, deferred tax adjustments, substance-based income exclusions, and qualified domestic minimum top-up tax (QDMTT) positions.

Executive Action:

• Confirm whether your MNE group meets the €750 million revenue threshold and, if so, identify your designated filing entity and home jurisdiction for the GIR submission.
• Verify your GIR submission status with your group tax function immediately — the 30 June 2026 deadline for calendar-year groups is now upon us.
• Request a briefing on any QDMTT elections made by constituent jurisdictions — these directly affect your effective minimum tax rate calculations.

What Did the OECD’s January 2026 Side-by-Side Package Change?

On 5 January 2026, the OECD reached agreement on its Side-by-Side Package — a set of Administrative Guidance amendments to the GloBE Model Rules that significantly altered the compliance landscape for the 2024 filing cycle.

The Package introduced four new safe harbours and extended an existing transitional safe harbour, reducing the compliance burden for groups with low Pillar Two exposure in specific jurisdictions. Critically for UK CFOs, the simplified computations available under these safe harbours require affirmative elections to be made in the GIR itself. Groups that did not update their GIR data collection processes after January 2026 may have filed without claiming available reliefs.

According to A&O Shearman’s analysis of the Package, the four safe harbours are designed to reduce administrative duplication where a group’s global effective tax rate is clearly above 15% in a given jurisdiction. However, each carries specific data requirements, and groups must document their eligibility with reference to financial accounting data at the constituent entity level.

The UK’s implementation of the Side-by-Side Package through secondary legislation and HMRC guidance notes was still being finalised as of Q1 2026. CFOs should confirm with their tax advisers which elements have been enacted into UK law and which remain as OECD Model Rules pending domestic incorporation.

Executive Action:

• Review your GIR with your group tax function against the January 2026 Side-by-Side Package: confirm whether available safe harbours were elected and whether any amended returns are required.
• Maintain documentation of your safe harbour eligibility analysis at the constituent entity level — HMRC may request this in any Pillar Two compliance review.
• Ensure your board’s Audit Committee has received a briefing on the group’s aggregate Pillar Two exposure and any material jurisdictions where top-up tax is payable.

How Should the Audit Committee Oversee Pillar Two Compliance?

Pillar Two is not merely a tax compliance matter. For UK-listed companies, the FRC’s UK-endorsed IFRS requirements under IAS 12 mean that Pillar Two creates both accounting disclosure obligations and board governance responsibilities.

Under IAS 12 (Disclosure of Taxes), companies must disclose the estimated impact of Pillar Two legislation on their current and deferred tax position, even where the standard IAS 12 accounting for deferred taxes is temporarily exempted. The FRC has confirmed this disclosure obligation applies in UK-endorsed IFRS financial statements for periods beginning on or after 1 January 2023.

The Audit Committee’s role is therefore dual: first, to satisfy itself that the group’s Pillar Two exposure has been correctly calculated and adequately disclosed in the financial statements; second, to challenge management on the adequacy of internal controls over the data collection, calculation, and filing processes. Given that the GIR covers more than 300 data fields per entity, the risk of error is material, and the Audit Committee should request an independent review of the process design.

According to Deloitte’s Pillar Two readiness analysis, most of the decisions that determine a group’s Pillar Two exposure sit with the CFO and group tax function — not with individual country teams. This centralisation of knowledge creates a significant single-point-of-failure risk that CFOs and Audit Committees should explicitly address in their governance frameworks.

Our Executive Briefings Library contains detailed guidance on FRC disclosure requirements and HMRC compliance frameworks. Download our Capital Approval Assessment template to structure your Pillar Two budgeting and provisioning process.

Executive Action:

• Ensure IAS 12 Pillar Two disclosures are included in financial statements for all periods covering fiscal year 2024 onwards — confirm with your auditors that the required narrative is complete.
• Put Pillar Two compliance on the Audit Committee’s Q3 2026 agenda: GIR filing status, safe harbour elections, and material top-up tax exposure by jurisdiction.
• Commission an independent review of your GIR data collection and calculation process — the 300-field scope creates a material risk of error that warrants Audit Committee-level attention.

What Are the Penalties and Enforcement Risks?

HMRC’s approach to Pillar Two enforcement is still being established, but the legislative framework is clear. The Finance (No.2) Act 2023 creates penalties for failure to file the GIR, failure to self-assess top-up tax, and incorrect returns. The standard penalty regime for inaccurate returns — up to 30% of the unpaid tax for non-deliberate errors, up to 70% for deliberate errors — applies.

More significantly, the MCAA data-sharing mechanism means HMRC will receive GIR data from other jurisdictions about UK constituent entities. This creates a cross-referencing capability that did not exist in traditional transfer pricing compliance: inconsistencies between what a UK group reports to HMRC and what constituent entities report to their local authorities will be visible to both parties simultaneously.

CFOs should treat the GIR as a permanent feature of the international tax compliance calendar — not a one-time exercise. The 2025 GIR will be due by 30 June 2027, and OECD member jurisdictions are actively developing targeted audit programmes for Pillar Two. The window to establish robust compliance processes before enforcement ramps up is now.

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