How does the OECD Pillar Two global minimum tax affect group financial statements under IFRS, and what does the IAS 12 exception mean in practice?

Pillar Two imposes a 15% minimum effective tax per jurisdiction; if the GloBE effective rate is below that, a top-up tax is due, typically collected at the parent. For accounting, the IASB amended IAS 12 with a mandatory temporary exception: groups do NOT account for deferred taxes arising from Pillar Two rules — only the current top-up tax expense is recognized as it arises. In practice that means: disclose that the exception is applied, disclose known or reasonably estimable exposure (jurisdictions with effective rates below 15%, share of profits affected, an indication of the expected top-up tax), and build the data pipeline, because GloBE calculations need entity-level data far beyond the tax provision — payroll, tangible assets for the substance carve-out, and adjustments from financial accounting profit to GloBE income. Safe harbours (e.g. based on CbCR data) reduce the burden temporarily but still require assessment per jurisdiction.