Pillar 1

1. Banking - regulation.

(P1).

Pillar 1 is the dimension of banking regulation which establishes minimum capital requirements based on market, credit and operational risks, and a minimum leverage ratio.

Additional capital requirements may be imposed by bank supervisors under Pillar 2.

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

Pillar 1 of the OECD's tax reforms proposed in 2021 would give taxing rights over the residual profits of large multinational enterprises to the jurisdictions where the customers and users are located.

Treasurers may need to assist in compliance with Pillar 1

"Pillar 1 [is] a new nexus rule, which reallocates a business’s residual profits to the jurisdictions that generate value without necessarily having a physical presence.

If Pillar 1 is introduced, treasurers may need to assist in compliance, setting up bank accounts and arranging funds transfers in order to meet these liabilities."

Graham Robinson, international tax and treasury partner PwC & Iain McDonald international tax and treasury director PwC - The Treasurer, Issue 4 2022 - December 2022, p40.

See also

• Bank supervision
• Base erosion and profit shifting (BEPS)
• Basel III
• Capital adequacy
• Capital Conservation Buffer
• Corporation Tax
• Countercyclical buffer
• Credit risk
• Effective tax rate (ETR)
• European Union
• Financial reporting
• Global Anti-Base Erosion Rules (GloBE)
• Gross domestic product (GDP)
• Group
• G7
• Holdouts
• Income Inclusion Rule (IIR)
• Income Tax
• Interest Rate Risk in the Banking Book
• Internal Capital Adequacy Assessment Process
• Leverage Ratio
• Market risk
• Multinational corporation/company
• Nexus rule
• Operational risk
• Organisation for Economic Co-operation and Development (OECD)
• Parent company
• Pillar 2
• Pillar 3
• PRA buffer
• Profit shifting
• Prudential Regulation Authority (PRA)
• Regime
• Risk management
• Sister company
• Stress
• Subject To Tax Rule (STTR)
• Supervisory Review and Evaluation Process (SERP)
• Tax
• Tax avoidance
• Tax compliance
• Tax evasion
• Tax haven
• Tax rate
• Three Pillars of Capital
• Top-up Tax
• Transfer pricing
• Undertaxed Payments Rule (UTPR)