/ BEPS Pillar 2 Status · Updated 2026-10-22
BEPS Pillar 2 India Implementation October 2026 Update, 15% global minimum tax now live for in-scope groups.
BEPS Pillar 2 (Global Minimum Tax at 15%) framework became operational in India from FY 2025-26 onwards for international groups with consolidated revenue above EUR 750 million. Operational compliance filings now ramping up. Indian subsidiaries of foreign MNC groups must file GloBE Information Return (GIR) alongside standard Indian compliance. Here's the current state and what in-scope companies must execute.
DC
Written by CA Durgesh Chavda
Chartered Accountant (ICAI) · Founder, Bharat Quantum Prospera · US incorporation, India-US DTAA, FEMA ODI, NRI taxation, cross-border structuring · LinkedIn
/ What's operational now
Three pillars of compliance.
- Qualified Domestic Minimum Top-up Tax (QDMTT): India has implemented QDMTT in Finance Act 2025 / 2026. If Indian jurisdiction effective tax rate (ETR) on Pillar 2 base is below 15%, QDMTT applies to raise it to 15%. Protects Indian tax base from being captured by other jurisdictions' IIR / UTPR.
- Income Inclusion Rule (IIR): ultimate parent entity jurisdiction's rule. For Indian ultimate parent of MNC group, India's IIR applies to top-up tax of low-taxed foreign subsidiaries.
- Undertaxed Payments Rule (UTPR): backstop. India's UTPR applies where IIR of other jurisdiction doesn't fully capture the top-up.
/ Who is in scope
The INR / EUR 750M threshold.
- MNC groups with consolidated revenue above EUR 750 million (~INR 6,400 crore) in at least 2 of 4 preceding FYs are in scope.
- In India: large multinationals (both Indian ultimate parents + Indian subsidiaries of foreign ultimate parents) are affected.
- Scope captures ALL constituent entities of the group globally, including Indian subsidiary even if small.
- Carve-outs: initial 5-year period of de minimis exclusion for cross-border MNCs, specific substance-based carve-out (payroll + tangible asset formula).
/ Compliance deliverables now live
Three documents.
- GIR (GloBE Information Return): filed by ultimate parent entity (if India) OR designated Indian entity on behalf of parent. Comprehensive Pillar 2 computation + jurisdiction-wise ETR + top-up tax calculation.
- QDMTT return: Indian entity-level filing confirming Indian ETR compliance.
- Form 3CEAE / 3CEAF / 3CEAG: specific Pillar 2 forms notified under Rule 10DB. Due timing: 15 months from end of FY (same as CbCR broadly).
- Penalty for non-filing: specific Pillar 2 penalties plus general Section 271BB framework.
/ What in-scope companies must do now
Action list.
- Scope confirmation: group consolidated revenue above EUR 750M threshold.
- GloBE base computation framework: Pillar 2 base = financial accounting net income (per IFRS / local GAAP) adjusted for specific Pillar 2 inclusions / exclusions.
- Jurisdiction-wise ETR computation: GloBE tax / GloBE base per jurisdiction.
- Top-up tax calculation where ETR < 15%.
- QDMTT provision in Indian entity books for FY 2025-26.
- GIR + QDMTT return preparation (15 months from FY-end).
- Co-ordination with group tax function at parent + Big-4 group Pillar 2 advisor.
- IT system changes: Pillar 2 calculation requires specific data extracts from ERP + consolidation system. Many groups implementing dedicated Pillar 2 software (e.g., Oracle, Thomson Reuters OneSource Pillar 2, Deloitte EngagEd).
Last updated: 2026-10-22.
/ Ready when you are
BEPS Pillar 2 compliance for FY 2025-26 is now operational.
QDMTT + IIR + UTPR + GIR + Form 3CEAE/3CEAF/3CEAG. BQP: scope confirmation + GloBE computation + filing. Co-ordinated with group Pillar 2 advisor.
FAQ
Common questions, answered.
Is BEPS Pillar 2 operational in India now?
Yes - from FY 2025-26 onwards for MNC groups with consolidated revenue above EUR 750 million. QDMTT (domestic minimum tax raising Indian ETR to 15%), IIR (for Indian ultimate parents), and UTPR (backstop) all operational via Finance Act 2025 / 2026 provisions. First GIR filings expected during late 2026 / early 2027.
What's QDMTT and does my Indian subsidiary face it?
Qualified Domestic Minimum Top-up Tax - India's rule to raise Indian ETR to 15% if below. Any Indian constituent entity of in-scope MNC group may face QDMTT if group's Indian ETR under Pillar 2 computation is below 15%. Protects Indian tax base from being captured by foreign IIR / UTPR.
Does Section 115BAA 22% rate protect from Pillar 2?
Partially. Section 115BAA effective rate is ~25.17% (22% + surcharge + cess). On GloBE base (not Income Tax base), ETR may differ from statutory 25.17% due to timing differences (deferred tax), permanent differences, cross-border adjustments. If Pillar 2 ETR falls below 15%, QDMTT applies. Companies with substantial tax holidays (Section 80-IAC, SEZ 10AA, etc.) may face Pillar 2 top-up.
When is first Pillar 2 return due in India?
15 months from end of FY. So FY 2025-26 Pillar 2 returns due approximately June 2027 (first year of full compliance). First-year transition provisions may provide short extensions. In-scope companies should start Pillar 2 base computation NOW to ensure data readiness.
Does BQP handle BEPS Pillar 2 compliance for in-scope groups?
Yes - Pillar 2 scope confirmation, GloBE base computation, jurisdiction-wise ETR analysis, QDMTT provisioning, Form 3CEAE / 3CEAF / 3CEAG preparation, Pillar 2 software implementation support, co-ordination with group tax function + Big-4 global Pillar 2 advisors. Scope-based engagement for Indian ultimate parents + Indian subsidiaries of in-scope MNC groups. WhatsApp +91 78018 87130.
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