Pillar Two Global Updates 2026: Country Implementation Roundup

Pillar Two has moved from rule-writing to rule-running, and 2026 is the year the detail is settled jurisdiction by jurisdiction. Across Europe and Asia, tax authorities are adopting the OECD's Side-by-Side package, activating the undertaxed profits rule, extending safe harbours and publishing the filing mechanics for the GloBE Information Return (GIR). For groups with entities in several of these countries, the changes are cumulative — each one adds a compliance step.

Key takeaways

• Sweden is adopting the OECD Side-by-Side package and extending its transitional CbCR safe harbour to 2028, applicable from 1 January 2027 with optional retroactive use.
• The Netherlands has clarified that a permanent establishment qualifies for Pillar Two purposes only where the source state actually taxes its income — withholding tax alone is not enough.
• Japan's 2026 tax reform introduces Side-by-Side and UPE safe harbours and a zero top-up tax for eligible groups, effective for fiscal years beginning on or after 1 January 2026.
• Greece has activated its UTPR from 5 April 2024 and its CbCR safe harbour, with GIR notifications filed via the myAADE portal.
• Austria has published its GIR filing process via FinanzOnline, and Belgium has postponed its first QDMTT and IIR return deadlines to 30 September 2026.

A common thread: the Side-by-Side package goes domestic

The OECD's Side-by-Side approach is being written into national law, and that is the clearest pattern running through the 2026 updates. Sweden's Finance Ministry has issued Draft Law Fi2026/00780 for consultation, adopting the side-by-side model to align with the global framework and extending the transitional CbCR safe harbour to 2028 to ease the compliance burden. The Swedish changes are set to apply from 1 January 2027, with optional retroactive application allowed. Japan's proposed 2026 reform runs in the same direction, launching Side-by-Side and UPE safe harbour measures and a zero top-up tax for eligible multinational groups for fiscal years beginning on or after 1 January 2026 — part of a wider package that also touches crypto-asset taxation and R&D incentives.

For groups headquartered outside these countries, the significance is indirect but real: as more jurisdictions adopt aligned safe harbours, the parent-level exposure under the income inclusion rule and UTPR becomes more predictable, even as the domestic filing detail multiplies.

Country-by-country snapshot

The table below maps the year's headline developments across seven jurisdictions, with the effective date or deadline attached to each. The sections that follow explain the ones with the widest reach.

The Netherlands tightens permanent-establishment tests

The Dutch update under the Minimum Tax Act 2024 (WMB 2024) tightens the permanent-establishment test: a PE — broadly, a taxable business presence such as a branch — qualifies for Pillar Two purposes only where the source state actually taxes its income on a net, separate-entity basis under Article 7 of the OECD Model Tax Convention. A PE subject only to withholding taxes, or one where the source country chooses not to exercise its treaty taxing rights, will not qualify. The practical message is that groups cannot assume a foreign branch is "taxed" for GloBE purposes simply because some tax was withheld; the character of that taxation matters.

The through-line across these updates is that Pillar Two compliance is now local. A single group can face a different filing portal, deadline and technical nuance in every country where it operates — and getting any one wrong can undermine an otherwise clean position.

Filing mechanics: Greece, Austria and Belgium

Three of the updates are about the plumbing of compliance rather than the substance of the tax. Greece has activated its Pillar Two rules under Law 5100/2024, with the UTPR effective from 5 April 2024; Greek constituent entities must file a Top-up Tax notification electronically via the myAADE portal, with a designated local entity filing for the group where several domestic entities exist, and penalties for late or non-compliant filing under Law 5104/2024. Austria's Federal Ministry of Finance has released a technical guide for submitting the GIR through the FinanzOnline platform, with test submissions available from March 2026. Belgium has postponed the deadlines for its first QDMTT and IIR returns to 30 September 2026, while stressing that the underlying tax obligations are unchanged — the extra time is for data collection and systems readiness, not a reduction in liability. Ireland, meanwhile, has updated its guidance through Revenue eBrief 058/26 to reflect Finance Act 2025 changes, covering points such as UTPR allocation, deferred tax and minority-owned entities.

What Pillar Two means for UAE and Gulf groups

For a group headquartered or operating in the UAE, these developments are a reminder that Pillar Two is a coordination problem. Where the group has constituent entities in Sweden, the Netherlands, Greece or Belgium, each jurisdiction's deadlines, portals and technical positions must be tracked and reconciled with the group's UAE DMTT filing. Consistent international tax and transfer pricing positions across those entities are what keep the group's global ETR defensible. In practice, SBC runs these entities off one master calendar, since the real risk is coordination — a single missed Greek notification or Belgian deadline can leave the group non-compliant even where every figure is right.

Frequently asked questions

What is the OECD Side-by-Side package that countries are adopting?

The Side-by-Side package is a set of OECD safe harbours agreed in early 2026 that lets the global minimum tax operate alongside other minimum-tax regimes. Countries such as Sweden and Japan are writing it into domestic law, typically introducing side-by-side and UPE safe harbours and, in Sweden's case, extending the transitional CbCR safe harbour to 2028.

When is Greece's UTPR effective?

Greece has activated its undertaxed profits rule with effect from 5 April 2024, under Law 5100/2024. Greek constituent entities must submit a Top-up Tax notification via the myAADE portal, and a designated local entity files on behalf of the group where multiple domestic entities exist.

When must Belgium's first QDMTT and IIR returns be filed?

Belgium has postponed the filing deadlines for its first QDMTT and IIR returns to 30 September 2026. The underlying tax obligations are unchanged; the extension simply gives in-scope groups more time to complete data collection, modelling and OECD reporting alignment.

Why does the Netherlands' PE clarification matter?

Because it affects whether a foreign branch counts as taxed for GloBE purposes. The Netherlands has confirmed that a permanent establishment qualifies only where the source state actually taxes its income on a separate-entity basis under Article 7 of the OECD Model — withholding tax alone does not qualify, which can change a group's effective tax rate calculation.

How SBC Tax Consulting can help

SBC helps multinational groups keep pace with Pillar Two as it beds in across jurisdictions. We maintain a jurisdiction-by-jurisdiction view of deadlines, filing portals and technical positions, reconcile them with your UAE DMTT obligations, and keep your GloBE Information Return and supporting data consistent everywhere you file. Our international tax and tax automation teams turn a fragmented set of local rules into one managed compliance calendar. Contact SBC to build yours.

This publication is for general information only and does not constitute professional advice. Please consult your SBC advisor before acting on any matter covered here.