Pillar Two disclosures in annual reports of European listed companies

This survey examines the impact of the Pillar Two income tax legislation as detailed in the 2023 annual reports of 100 large listed European firms. While 71% of companies indicated that the impact of Pillar Two income taxes was not significant, only a third of companies with an IFRS effective tax rate between 15% and 20% expected the impact to be insignificant. Approximately 25% of companies quantified the expected impact, with 90% of these disclosing it as a point estimate or a range of less than 1 percentage point of ETR. However, only 10% disclosed an expected increase in effective tax rate aligning with the OECD’s estimates. Pillar Two income taxes do not appear to have been a significant audit concern in the 2023 financial statements.