Tax Planning
Planning for a Post-Pillar Two World: Global Minimum Tax Strategies
With more and more jurisdictions implementing OECD’s Pillar Two rules, this article offers global tax planning strategies to navigate minimum effective tax rates, especially for digital businesses and multinationals.
By NomadicTax Research Team • 5-8 min read • September 9, 2026
## Understanding Pillar Two and Why It Matters Globally
The OECD’s Tax Policy Reforms 2026 report documents a significant trend: increasing use of global minimum taxation standards like Pillar Two, which require multinational enterprises to pay a minimum effective tax rate in each jurisdiction. Jurisdictions are pairing rate-level reforms with base broadening and narrowing to ensure compliance and fairness, especially in sectors like tech, manufacturing, and strategic industries. ([oecd.org](https://www.oecd.org/en/publications/tax-policy-reforms-2026_43d18a55-en.html?utm_source=openai))
## Key Tax Planning Strategies
1. **Align your structures to avoid top-up taxes**
• Review where your entities are located and whether their income is currently taxed below the minimum rate in jurisdiction. If so, explore whether re-structuring can increase the effective rate (e.g. via incentives, regional hubs, or reorganising IP ownership).
• Use R&D credits or investment allowances where available – many jurisdictions are introducing generous incentives for innovation, AI, and strategic technologies. ([oecd.org](https://www.oecd.org/en/publications/tax-policy-reforms-2026_43d18a55-en/full-report/tax-policy-reforms_82075677.html?utm_source=openai))
2. **Document carefully and manage permanent establishments**
• The BEPS framework and Pillar Two require accurate mapping of where income arises, where value is created, and ensuring that taxable profit is allocated properly. Activities that trigger a permanent establishment in low-tax jurisdictions will attract top-up taxes.
• Maintain detailed transfer pricing documentation and ensure your profits reflect substance, not just legal form. Governments are scrutinising sector-specific taxes and surtaxes on financial and digital service activities. ([oecd.org](https://www.oecd.org/en/publications/tax-policy-reforms-2026_43d18a55-en/full-report/tax-policy-reforms_82075677.html?utm_source=openai))
3. **Use location-based incentives wisely**
• Consider jurisdictions offering tax holidays, special zones, or accelerated depreciation that still align with minimum rate requirements. For example, Peru’s development hubs, Mexico’s accelerated depreciation for fixed assets, and other similar schemes. ([oecd.org](https://www.oecd.org/en/publications/tax-policy-reforms-2026_43d18a55-en/full-report/tax-policy-reforms_82075677.html?utm_source=openai))
• Ensure that incentives do not conflict with anti-abuse rules, and that substance requirements are met so benefits aren’t clawed back.
4. **Monitor digital economy VAT changes**
• Non-resident suppliers and online platforms are now more frequently falling under VAT obligations in multiple jurisdictions. Keeping up with registration, compliance, and collection rules will reduce exposure. ([oecd.org](https://www.oecd.org/en/publications/tax-policy-reforms-2026_43d18a55-en/full-report/tax-policy-reforms_82075677.html?utm_source=openai))
• Use marketplace facilitator regimes, where applicable, to shift some obligations to platforms rather than individual vendors.
## Examples & Actionable Insights
- A US-based SaaS provider with EU customers now likely needs to calculate whether any of its EU sales could be taxed under local VAT rules, registering in those EU member states if required. Importantly, the provider should model effective tax rates in each jurisdiction to ensure Pillar Two compliance.
- A manufacturer considering investing in Peru’s new tourism zone should analyse whether the preferential CIT rate and deductions still meet substance and anti-abuse criteria and whether the overall ETR leads to top-up taxes under Pillar Two.
## Bottom Line
In 2026, tax policy globally is being rewritten: governments are pairing revenue needs with fairness, targeting digitalisation, and demanding transparency. **Stay ahead by modelling effective tax rates, aligning substance with form, and using incentives that are robust under evolving anti-avoidance rules.**