The OECD's Pillar Two framework — commonly referred to as the Global Minimum Tax — represents the most significant shift in international tax policy in a generation. Introduced to combat base erosion and profit shifting by multinational enterprises, Pillar Two introduces a 15% global minimum effective tax rate for large corporate groups with annual revenues exceeding €750 million. For smaller private groups, the direct impact is limited, but the indirect consequences are far-reaching.

The Qualified Domestic Minimum Top-Up Tax

One of the key mechanisms of Pillar Two is the Qualified Domestic Minimum Top-Up Tax (QDMTT), which allows jurisdictions to collect a top-up tax on entities that are taxed below the 15% minimum. This effectively reduces the competitive advantage of traditional low-tax offshore jurisdictions for large multinationals, as the tax benefit is simply collected elsewhere rather than being eliminated entirely.

“Pillar Two does not eliminate offshore planning — it reframes it. Substance, not just structure, is now the defining factor.”

Implications for Private Wealth Structures

For private clients and family offices, Pillar Two's direct applicability is limited given the revenue threshold. However, its cultural impact on global tax policy is significant. Jurisdictions that previously competed aggressively on tax rates are now pivoting toward offering substance-based advantages: favourable treaty networks, sophisticated legal frameworks, and genuine operational infrastructure. This means that the rationale for where you locate a holding company has fundamentally shifted.

Glenmuir International advises clients to review their existing structures in light of Pillar Two and the broader BEPS (Base Erosion and Profit Shifting) framework to ensure that each entity within a group has demonstrable economic substance. Our compliance team works alongside specialist tax counsel to conduct structural reviews and recommend adjustments where necessary. A personal introductions to the foremost tax Barristers can be arranged.