OECD's Pillar Two in South Africa

Understanding the OECD’s Pillar Two framework in South Africa

What is the OECD Pillar Two framework?

The OECD Pillar Two framework introduces a global minimum corporate tax rate of 15%, designed to combat tax base erosion and profit shifting. This major change impacts multinational enterprises (MNEs) operating across multiple jurisdictions, creating complex compliance challenges. 
Understanding how this framework applies to your business is essential to minimising risks and maximising financial opportunities.

When do the new rules take effect in South Africa?

The Global Minimum Tax Act No. 46 of 2024 (“the GMTA”) was promulgated on 24 December 2024. 
The Act is deemed to have come into operation on 01 January 2024 and applies to fiscal years ended on or after that date.

In addition, the Global Minimum Tax Administration Act No 47 of 2024  (“the GMTAA”)was promulgated on 09 January 2024.

This sets out the administrative requirements specific to the implementation of the GMTA.

Who is impacted by Pillar Two in South Africa?

In South Africa, the Pillar Two rules primarily impact on multinational enterprise groups with consolidated annual revenues of at least €750 million. These organisations, whether headquartered locally or abroad, and their South African subsidiaries or branches, are required to ensure their effective tax rate meets the 15% global minimum. The framework also extends to certain domestic groups meeting the revenue threshold, making it crucial for large, complex corporate structures to evaluate their exposure and readiness for the new regime.

What actions should organisations take now?

If your business is affected, taking proactive steps now can mitigate risk and keep you ahead of the changes.

• Assess your organisation’s exposure to Pillar Two taxes.
• Review and enhance your financial reporting systems to meet new compliance requirements.
• Collaborate with experienced tax advisors to develop strategies for minimising your tax burden.
• Stay informed about ongoing regulatory updates in your jurisdiction.

Why choose RSM for Pillar Two compliance?

RSM combines global insights with local expertise to provide tailored support for navigating the complexities of the OECD’s Pillar Two framework.

• Proactive solutions to minimise financial risks.
• Expert guidance on new tax regulations.
• Customised strategies to align with your business objectives.
• Localised expertise combined with the global network of RSM professionals.

RSM South Africa has dedicated, specialist expertise able to assist our clients with the specific complexities arising from the implementation of Pillar Two in South Africa.

Get Pillar Two ready with RSM in South Africa

Navigating the Pillar Two framework can feel overwhelming. RSM is here to simplify things for you. With expert guidance and tailored strategies, RSM helps middle market organisations in South Africa adapt to these changes, ensuring compliance and optimising their tax outcomes.