Over the break, Revenue has updated its Tax and Duty Manuals (TDMs) relating to Pillar Two which is the core guidance for companies to calculate taxes due under Pillar Two. The relevant manuals are TDM 01A-01-01A which provides guidance on the Pillar Two registration process and TDM 04A-01-02 which is the core guidance for companies calculation taxes under Pillar Two. In terms of registering for taxes under Pillar Two, companies should note that the deadline for registering has been extended to 28 February 2026 (previously 31 December 2025).
Revenue guidance on Pillar Two
Revenue has updated several areas of its guidance on Pillar Two. The changes include:
- Section 6.10, regarding the calculation of the Undertaxed Profit Rule (UTPR), has been updated for scenarios where there has been a merger.
- Section 8.9 has been updated to clarify the treatment of post-filing adjustments and tax rate changes.
- Section 9.8, regarding the Transitional Country-by-Country Reporting (CbCR) Safe Harbour, has been updated to clarify how a decrease in covered taxes affects the calculation of simplified covered taxes.
- Section 9.8.1 clarifies how the Transitional CbCR Safe Harbour applies where there is a change in tax residency of an in-scope entity.
- Section 10.2 discusses the impact of mergers and constituent entities joining and leaving in-scope groups.
- Section 11.5 clarifies the election to treat an investment entity as a tax transparent entity and the determination of the minimum tax rate applicable.
Revenue has advised that the TDM will be updated further in due course to reflect the amendments made in Finance Act 2025.
Revenue guidance on Pillar Two registration
Revenue has also updated several sections of its guidance on registering for Pillar Two taxes. These include:
- A new paragraph explaining a new administrative practice for inactive or dormant entities that meet certain requirements.
- A new paragraph explaining an administrative practice where there is a dissolved entity.
- A paragraph explaining the registration process for entities without an active tax registration.
- Clarification on the ROS permissions required by agents using a ROS sub-user certificate.
- New guidance on approving agent link requests.
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