Transfer Pricing: UK Pillar 2 registration overview

published on 30 May 2025 | reading time approx. 2 minutes

Significant developments have occurred since the OECD introduced the Pillar 2 framework. As announced by the UK government, the proposal to implement the Pillar 2 requirements was given priority and adopted within a short period of time. We have summarized all the important decisions, developments, and deadlines for you in the following article.

Pillar 2 Requirements

The OECD’s Pillar 2 framework is designed to ensure that multinational enterprises (MNEs) pay a minimum level of tax on their profits (an effective tax rate of at least 15 per cent) in each jurisdiction that they operate within. Compliance with these regulations is essential to avoid penalties and ensure smooth operations.

Applicability of Pillar 2 Rules

Groups fall into the Pillar 2 rules if they meet certain criteria, including having a group consolidated turnover of 750 million euros or more in two of the previous four years. It is important to assess whether your group meets this threshold to determine your obligations under the Pillar 2 framework.

Group’s head office reporting requirements

As with most transfer pricing related topics, Pillar 2 needs to be spearheaded by the group’s head office who will be in a better position to assess worldwide obligations and reporting requirements.

For example, if the ultimate parent entity (UPE) is based in Germany, we anticipate that the main Pillar 2 worldwide calculations/assessments and the Global Anti-Base Erosion (GloBE) Information Return (GIR) will be submitted annually in Germany.

UK reporting requirements

1. Pillar 2 Registration

There is a one-time requirement for the ultimate parent entity (UPE) or a nominated filing member (e.g. a UK limited company) to register with HMRC within six months of coming into scope of the rules – for example, groups with a 31 December 2024 year end who already meet the turnover requirement must register by 30 June 2025.

Please see our summary in respect to Pillar 2 registration.

Although agents are not permitted to apply for Pillar 2 registrations directly on behalf of clients, we can provide advice on an ad hoc basis (e.g. via screen share) on registration related queries.

2. Annual returns

For groups that have submitted the GIR in the head office’s jurisdiction and they have an information sharing agreement with HMRC (e.g. Germany) then there are two further annual returns required in the UK

Overseas Return Notification (ORN) - Informing HMRC about your overseas GIR filing status and providing any relevant details about your operations. It needs to be submitted to HMRC within 15 months after the end of the accounting period (extended to 18 months for a group’s first return, i.e. 30 June 2026 if first return is for the year ended 31 December 2024).
UK Pillar 2 Self Assessment Return - Completing and submitting an annual domestic information return to confirm entities’ UK top-up tax liabilities (including a nil liability). It needs to be submitted to HMRC within 15 months after the end of the accounting period (extended to 18 months for a group’s first return, i.e. 30 June 2026 if first return is for the year ended 31 December 2024).

3. Payment of the UK top-up tax liability

Payment of the UK top-up tax liability in a single instalment due 15 months after the end of the accounting period (18 months for a group’s first return, i.e. 30 June 2026 if first return is for the year ended 31 December 2024).

Importance of Compliance

Failure to comply with the UK Pillar 2 requirements can result in significant penalties and legal complications. It is essential to ensure that all necessary documentation is submitted accurately and on time.