Pillar 2: Difference between revisions

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imported>Doug Williamson
(Add quote - source - The Treasurer - 2022 - Issue 4 - December 2022 - p40.)
(Differentiate banking and tax rules.)
 
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1.  ''Banking - regulation.''
1.  ''Banking - supervision - regulation.''


(P2).
In banking supervision and regulation, Pillar 2 addresses firm-wide governance and risk management, among other matters.
 
Pillar 2 is the aspect of banking supervision which addresses firm-wide governance and risk management, among other matters.


Additional capital requirements may be imposed by bank supervisors under Pillar 2, depending on their evaluation of banks' internal assessments of their risks and capital requirements.
Additional capital requirements may be imposed by bank supervisors under Pillar 2, depending on their evaluation of banks' internal assessments of their risks and capital requirements.
=====UK Pillar 2 supervisory reviews=====
The UK supervisor is the Prudential Regulatory Authority (PRA).
There are two main areas that the PRA considers when conducting a Pillar 2 review:
(i) Risks to the firm which are either not captured at all, or not adequately captured, under Pillar 1 capital requirements, referred to as Pillar 2A; and
(ii) Risks to which the firm may become exposed over a forward-looking planning horizon - e.g. due to external stresses - referred to as Pillar 2B.
The assessment will generally include an Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP).
=====IRRBB=====
Most regulators worldwide treat Interest Rate Risk in the Banking Book (IRRBB) as a Pillar 2 risk.




2.  ''Tax - profit shifting - Global Minimum Tax - Organisation for Economic Co-operation and Development (OECD).''
2.  ''Tax - profit shifting - Global Minimum Tax - Organisation for Economic Co-operation and Development (OECD).''


Pillar 2 of the OECD's tax reforms agreed in 2021 provides detailed rules to implement a global minimum tax rate of 15% on large multinational enterprises.
In international taxation, Pillar 2 of the OECD's tax reforms agreed in 2021 provides detailed rules to implement a global minimum tax rate of 15% on large multinational enterprises.
 
 
:<span style="color:#4B0082">'''''Most tax territories expected to implement Pillar 2'''''</span>
 
:"Pillar 2 will require calculation of specific effective tax rates by territory: where this is below 15%, a top-up tax will arise.
 
:Where a territory does not collect this tax (for example, if it does not implement the rules), it is collected by other territories in which the group operates.
 
:Therefore, most territories are expected to implement Pillar 2, because the alternative is to give away tax revenues to others."
 
:''Graham Robinson, international tax and treasury partner PwC & Iain McDonald international tax and treasury director PwC - The Treasurer, Issue 4 2022 - December 2022, p40.''




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* [[Capital adequacy]]
* [[Capital adequacy]]
* [[Corporation Tax]]
* [[Corporation Tax]]
* [[Domestic Minimum Tax]]
* [[Effective tax rate]]  (ETR)
* [[Effective tax rate]]  (ETR)
* [[European Union]]
* [[Global Anti-Base Erosion Rules]]  (GloBE)
* [[Financial reporting]]
* [[Global Anti-Base Erosion Rules]]  (GloBE]
* [[Gross domestic product]]  (GDP)
* [[Group]]
* [[G7]]
* [[Holdouts]]
* [[Income Inclusion Rule]]  (IIR)
* [[Income Inclusion Rule]]  (IIR)
* [[Income Tax]]
* [[Interest Rate Risk in the Banking Book]]
* [[Internal Capital Adequacy Assessment Process]]
* [[Internal Capital Adequacy Assessment Process]]
* [[Multinational corporation/company]]
* [[Multinational corporation/company]]
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* [[Parent company]]
* [[Parent company]]
* [[Pillar 1]]
* [[Pillar 1]]
* [[Pillar 2 - banking supervision]]
* [[Pillar 2 - global tax rules]]
* [[Pillar 3]]
* [[Pillar 3]]
* [[PRA buffer]]
* [[Profit shifting]]
* [[Profit shifting]]
* [[Prudential Regulation Authority]]  (PRA)
* [[Prudential Regulation Authority]]  (PRA)
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* [[Tax haven]]
* [[Tax haven]]
* [[Tax rate]]
* [[Tax rate]]
* [[Top-up tax]]
* [[Top-up Tax]]
* [[Transfer pricing]]
* [[Transfer pricing]]
* [[Undertaxed Payments Rule]]  (UTPR)
* [[Undertaxed Payments Rule]]  (UTPR)




==External link==
==External links==
*[https://www.oecd.org/tax/beps/tax-challenges-arising-from-the-digitalisation-of-the-economy-global-anti-base-erosion-model-rules-pillar-two.htm OECD - Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two) - Commentary]
*[https://www.oecd.org/tax/beps/tax-challenges-arising-from-the-digitalisation-of-the-economy-global-anti-base-erosion-model-rules-pillar-two.htm OECD - Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two) - Commentary]
*[https://www.oecd.org/tax/beps/pillar-two-model-rules-in-a-nutshell.pdf Pillar Two rules in a nutshell - OECD]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]

Latest revision as of 22:08, 13 September 2024

1. Banking - supervision - regulation.

In banking supervision and regulation, Pillar 2 addresses firm-wide governance and risk management, among other matters.

Additional capital requirements may be imposed by bank supervisors under Pillar 2, depending on their evaluation of banks' internal assessments of their risks and capital requirements.


2. Tax - profit shifting - Global Minimum Tax - Organisation for Economic Co-operation and Development (OECD).

In international taxation, Pillar 2 of the OECD's tax reforms agreed in 2021 provides detailed rules to implement a global minimum tax rate of 15% on large multinational enterprises.


See also


External links

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