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pillar 2

Pillar 2 Module FAQs

Welcome to our FAQ page on the Pillar 2 module.
We have compiled a list of commonly asked questions and their corresponding
answers to help you better understand our Pillar 2 software & services. 

About TaxModel

Who is TaxModel?

TaxModel is a SaaS company that provides tax technology solutions used by tax professionals working in-house or within intermediaries. Our software solutions are designed to simplify international direct tax compliance, and risk management, provide valuable insights for various stakeholders, and are built on innovative technologies. 

Based in the Netherlands, TaxModel serves many clients globally, especially multinational corporations, tax law firms, and tax advisory firms. We strongly focus on client satisfaction and are committed to providing personalized support and expertise to help clients meet their tax challenges. 

TaxModel has received numerous recognitions for its innovative tax solutions, and its team includes tax professionals, software developers, and data scientists with deep expertise in tax law, technology, and analytics. 

Why choose TaxModel as your tax technology partner?

TaxModel helps tax professionals and organizations meet the complex and evolving challenges of tax compliance and planning in an increasingly globalized and digitalized world. Tax compliance is becoming more complex due to changes in tax laws, regulations, and reporting requirements, as well as increased scrutiny and enforcement by tax authorities. Tax management is also becoming more complex due to the increasing globalization of business and the need to optimize tax positions while balancing legal, ethical, and reputational considerations.  

TaxModel simplifies these complex tax processes and provides tax professionals and organizations with innovative and intelligent software solutions that enable them to make better decisions. We do this by leveraging cutting-edge technology, including artificial intelligence, machine learning, and data analytics, to provide best-in-class tax solutions that are intuitive, efficient, and reliable. 

TaxModel helps tax professionals and organizations navigate the tax landscape with confidence and clarity, enabling them to focus on their core business activities and achieve their goals. 

What is TaxModel‘s mission, and how does the Pillar2 Module fit into that mission?

TaxModel’s mission is to offer advanced SaaS technology to our clients that enable them to take control over their international direct tax compliance. Our journey is to have ready our direct tax control framework suite (“TaxSuite”) for MNE Groups in 2025. It will contain vertical solutions for transfer pricing compliance (documentation, benchmarking, and Country-by-Country), tax provisioning, Pillar 2, and DAC6. The commonality between our tools is that they are all structured to assist with data collection and repository, analysis, and reporting. 

In 2025 we will rebuild our CbCR Module as a new horizontal solution that will aggregate data from all vertical solutions, enforcing efficiency and quality. Of course, this layer will include workflow management features, analytics, and dashboarding.  

TaxModel‘s current and upcoming technology is as follows: 

Transfer pricing compliance 

  • TPdoc (master-local files automation) – First release in 2021 
  • TPbenchmark (benchmark automation) – First release in 2017 
  • TPcbc (XML converter Country-by-Country Report) – First release in 2017 (to be upgraded in 2024 for Pillar 2 and public CbCR)

Tax provisioning 

Pillar 2 compliance 

 DAC6 compliance 

About Pillar 2 module

What is the purpose of TaxModel's Pillar 2 Module?

The purpose of TaxModel‘s Pillar 2 Module is to support MNE Groups with: 

  1. Pillar 2 data collection – TaxModel will offer a public API for its Pillar 2 Module and offer integrations with Microsoft Office, the most common tax provisioning and financial accounting systems, to ensure a smooth retrieval of data, data updation, and perform various tax-related calculations.
  2. Pillar 2 data processing – the Pillar 2 Module will offer a powerful engine to calculate GloBE income/losses, Covered Taxes, GloBE Effective Tax Rate, GloBE Top-up Tax at the constituent entity, jurisdictional, and consolidation level, including safe harbor calculations.
  3. Pillar 2 allocation and offsetting mechanism – this part of the Pillar 2 Module will determine the attribution to and offset of Top-up Tax at the ultimate, intermediate, and/or partially owned parent entity levels.
  4. Pillar 2 reporting – the Pillar 2 Module will include a standardized GloBE Information Return that provides information on the tax calculations made by the MNE Group and contains the information a tax administration needs in order to evaluate the correctness of a Constituent Entity‘s GloBE tax liability and to perform an appropriate risk assessment, including XML compatible reports. Besides the GloBE Information Return, the Pillar 2 Module will also provide summary reports for stakeholders and IAS12 reporting, as well as reports to provide relevant data points to reduce the manual efforts in preparing domestic Top-up Tax Returns.
  5. Pillar 2 knowledge base – the Pillar 2 Module will include a knowledge base that will – in the first instance – include all OECD publications around GloBE Rules, consultation documents, and administrative guidance.  Later, we may add country-specific official publications, feedback, and experiences of our Pillar 2 community around interpretations.
  6. Pillar 2 additional features – additional developments of our Pillar Two module will depend on introducing additional GloBE provisions, such as the GloBE backstop mechanism, which will provide automated calculations of the UTPR, including the allocation and adjustment. Of course, we will also incorporate must and should-have improvements collected from our Pillar Two community.

Overall, the Pillar2 Module will be a powerful platform designed to support collaboration and teamwork. With its user roles and permissions, collaboration workspaces, workflow approval process, and audit trails, TaxModel’s Pillar 2 module makes it easy for teams to work together and achieve their goals. 

Is the Pillar 2 software compliant with any relevant industry standards or regulations?

All our tools are or will be built based on international regulatory frameworks such as the OECD transfer pricing guidelines 2022, Country-by-Country, IAS12/ASC740, GloBE Rules, and the EU Mandatory Disclosure Rules. Although we believe that software should not automate national legislation, we sometimes automate local deviations from the international frameworks and always allow room for localization in our tools, audit trails, and knowledge.  

Can Pillar 2 Module be used in a multi-user or collaborative environment?

Yes, Pillar 2 Module will be designed for use in a multi-user or collaborative environment. Here are a few features that make collaboration easy:

  • User Roles and Permissions: Pillar 2 Module allows administrators to define user roles and permissions, which determines what different users can access and edit within the platform. This makes it easy for businesses to assign roles and responsibilities to different team members and ensure that they have the appropriate access to the tools and data they need.
  • Collaboration Workspaces: Pillar 2 Module has collaboration workspaces that allow teams to work together on tasks, processes, and reports. Users can share data, collaborate on tasks, and provide feedback to each other within the workspace.
  • Workflow Approval: Pillar 2 Module has a workflow approval process that allows multiple users to collaborate on financial close processes. Users can submit items for review and approval, and multiple users can review and approve them in a specified sequence.
  • Audit Trails: Pillar 2 Module has robust audit trails that track user activity within the platform, which makes it easy to track changes and monitor user activity.

What is the timeline for the release of the Pillar 2 Module?

The Pillar 2 Module will be released in 3 (three) phases.

The first phase will be released before the 1st of April 2024 and include data collection and data processing.

The second phase will be released before the 1st of July 2024, including Pillar 2 allocation and offsetting mechanism .

The third phase will be released before the 1st of January 2025, including Pillar 2 reporting and knowledge base

TaxModel has determined the release dates based on the Pillar 2 GloBE regulations and guidance as published to date. The final release dates of the software cannot be guaranteed due to the potential impact of legislative changes on the software’s features and workflow. TaxModel will not accept any liability for any delays or non-performance resulting from such changes and will work in good faith to adjust the schedule and scope of the project accordingly.

How do I register for the Pillar 2 Early Registration Program?

To register for the Pillar 2 Early Registration Program, you can follow these steps: 

  1. Go to the TaxModel website here and click the “Register” button in the bottom left corner of the page.
  2. Fill out the contact form with your information expressing your interest in registering for the Pillar 2 Early Registration Program.
  3. A representative from TaxModel will contact you to discuss your needs and provide you with pricing and licensing options.
  4. Once you have agreed to the terms and pricing, you will receive a digital contract to sign.
  5. After signing the contract and making any necessary payments, TaxModel will set you up for onboarding into the Pillar 2 Early Registration Program. 

What will I miss out on if I do not opt for TaxModel‘s Pillar 2 Early Registration Program before the 1st of May 2023?

You will miss out on the following range of benefits: 

  1. Early access to the Pillar 2 Module: By registering for the Pillar 2 Early Registration Program, you can access the module before they are available to the general public. This means that you can be one of the first to experience the latest in tax technology.
  2. Discounts and special offers: we offer discounts and special offers taht are unvailable to customers who do not participate in the program, such as:
    1. 25% discount on the Pillar2 Basic price of € 30,000; or
    2. Free subscription to TaxModel‘s DAC6pro Premium platform
    3. 3-Year price guarantee
  3. Input into product development: we allow customers to give feedback on products during the development process. This means that customers can have a say in the design and functionality of the products they will ultimately receive.
  4. Limited edition products: We offer a detailed excel based Pillar 2 Impact Analysis package that is only available to early backers. This product will support you in your Pillar 2 reporting requirements under IAS12 for 2023. 

IT & Security

What operating systems are compatible with the Pillar2 Module?

TaxModel’s Pillar 2 Module will be a cloud-based software platform that can be accessed using any modern web browser on any operating system, including Windows, macOS, Linux, and mobile operating systems like iOS and Android. Therefore, as long as you have a modern web browser, you can use the Pillar 2 Module regardless of your operating system. 

What are the system requirements for installing and using the Pillar2 Module?

Since the Pillar 2 Module will be a cloud-based platform, there are no specific system requirements for installing the software on your device. However, to access and use the Pillar 2 Module, you will need a reliable internet connection and a modern web browser. 

Is technical support available if I encounter issues with the software?

Yes, TaxModel offers technical support to its users. Users with paid subscription plans can access TaxModel’s technical support team directly through the Pillar 2 platform, by email, or via phone. The support you receive depends on your plan level, with higher-level plans offering more comprehensive support. 

TaxModel takes immediate ownership of technical issues reported and seeing problems through to resolution, as follows:

  • Response time: within 24 (twenty-four) hours TaxModel will research, diagnose, troubleshoot, identify solutions with regard to issues reported and report back to Subscriber the timing of resolution, which under no circumstances will be in excess of 5 (five) business days since the issue was reported;
  • Working hours: technical support will be available during regular office hours (i.e. between 9 AM and 5 PM Central European Time zone);

In addition to technical support, TaxModel offers a wide range of resources, including documentation, tutorials, and webinars, to help users get the most out of the platform. 

What kind of security measures are in place to protect my Pillar 2 data?

TaxModel takes data security very seriously and has implemented a range of security measures to protect user data. Here are some of the security measures in place in the Pillar2 Module: 

  • Data encryption: All data transmitted to and from the Pillar2 Module will encrypted using 256-bit SSL/TLS encryption, which is the industry standard for secure data transfer.
  • Two-factor authentication: the Pillar2 Module offers two-factor authentication to add an extra layer of security to user accounts. With two-factor authentication, users need to enter a unique code sent to their phone or email in addition to their password to access their account.
  • The Pillar2 Module seamlessly integrates with Azure Active Directory, a cloud-based identity and access management solution. This centralizes identity management, simplifies administration, and enhances security by preventing unauthorized access.
  • Role-based access control: the Pillar2 Module offers role-based access control, which allows administrators to control who has access to what data and features within the platform. 
  • Regular security audits: the Pillar2 Module performs regular security audits and vulnerability assessments to identify and address potential security issues.
  • Data backup and recovery: the Pillar2 Module automatically backs up user data daily and stores it in multiple locations for redundancy. This ensures that in the event of a data loss, data can be quickly restored.
  • Compliance certifications: TaxModel has obtained the ISO 27001 compliance certifications and has started the procedures for SOC 2 Type II, which demonstrate its commitment to data security and privacy. 

Overall, TaxModel has implemented robust security measures to protect user data and maintain data privacy. 

Can the Pillar2 Module be integrated with other applications or systems?

As part of the Pillar 2 Module roadmap, TaxModel will provide a REST API that allows developers to integrate with the Pillar 2 Module to manage and automate tax provision processes.  

This API will offer a wide range of functionality, including the ability to retrieve data, update data, and perform various tax-related calculations. Additionally, the API will be designed to be flexible and configurable, so developers can customize them to meet their specific business requirements. 

TaxModel’s APIs are designed to be user-friendly and easy to integrate with other software applications. They are well-documented and offer a range of sample codes and documentation to help developers get started quickly. TaxModel also provides support and training for developers who are integrating with their solutions. 

The upcoming Pillar 2 Module will also support multiple integrations with existing Tax and Financial accounting systems. These integrations allow users to sync data between their existing tax provisioning solutions and the Pillar 2 Module, ensuring data consistency across systems.

Overall, TaxModel offers a wide range of integrations, making it easy to connect with other tools and systems and streamline workflows. 

How often is the software updated, and how are updates delivered?

After the release of phase 1, the Pillar 2 Module will be updated frequently with new features, bug fixes, and improvements. These updates can include new features, performance improvements, bug fixes, and security updates. 

Software updates are delivered automatically to all users, so there is no need to manually download or install updates. This means that as soon as a new update is released, all users will have access to the new features and improvements. 

Can the software be customized to fit my specific needs or requirements?

While TaxModel is flexible and offers a lot of customization options, there may be some limitations in terms of customizing the platform to meet specific business needs. For example, some users may find that certain design changes or integrations are not possible within the platform. Specific requests will be assessed to determine whether these benefit the entire Pillar 2 community and may be subject to separate scoping and pricing. 

Will there be a beta version made available to test the software before being released to the general public?

Yes, TaxModel will offer Early Registrants beta programs for users who want to test the 3 release phases of the Pillar 2 Module before they are released to the general public. These beta programs allow users to provide feedback and help shape the development of the Pillar 2 Module. 

How does TaxModel handle backups and data recovery?

TaxModel uses Microsoft Azure for backups and data recovery in a number of ways:  

  • Azure Backup: Azure Backup is a cloud-based backup solution that allows TaxModel to protect its data and applications in Azure. With Azure Backup, TaxModel schedules backups of their data and stores it in Azure, which provides redundancy and disaster recovery capabilities.
  • Azure Storage: Azure Storage provides highly scalable and available cloud storage for TaxModel. TaxModel uses Azure Storage to store its data and applications and take advantage of features like replication, redundancy, and geo-replication to ensure that its data is always available.
  • Azure SQL Database: Azure SQL Database is a fully managed relational database service that allows TaxModel to run its databases in the cloud. With Azure SQL Database, TaxModel uses built-in backups, point-in-time restore, and geo-replication features to ensure client data is always protected and available. 

Overall, Azure provides a range of backup and data recovery options that TaxModel uses to protect its data and applications in the cloud. By leveraging Azure’s redundancy and disaster recovery capabilities, TaxModel can ensure that its customer’s data is always safe and available.