Exclusive: Michael Vassilieff warns MNEs on BEPS Pillar Two

Tax teams across the globe are racing to prepare for BEPS Pillar Two, a sweeping reform designed to ensure large multinationals pay a minimum level of tax.

For many, the challenge is less about awareness and more about the speed and depth of preparation.

Michael Vassilieff, sales director for CCH Integrator at Wolters Kluwer Tax & Accounting Asia Pacific, based in Sydney, has spent nearly two decades working with finance, tax and legal teams across the Asia Pacific region. 

He says the urgency of action is now critical.

"The biggest and most recent risk at present is really the penalties for late lodgements," he said, during a recent interview. "The ATO just released guidance stating that every business in scope for Pillar Two will need to lodge a local return in June 2026. That's not too far away."

Vassilieff explained that penalties would align with those already applied to significant global entities. While some relief may be possible, businesses must take "reasonable measures" to comply. "Acting with urgency is quite pivotal right now," he added.

Despite rising awareness, confusion persists. One of the most common misconceptions, according to Vassilieff, is the belief that falling under safe harbours absolves companies of responsibility.

"The biggest misconception over the last year or so is that falling under safe harbours means you don't have to do anything," he said. "Yes, while safe harbours mean you don't need to pay top-up tax, you still need to lodge your return, and there are penalties if you don't."

Ownership of data within multinationals is another sticking point. Local subsidiaries often assume overseas headquarters are responsible for reporting, but regulators are increasingly demanding local returns. "That's quite a confusing point for many subsidiaries," he explained. CCH Integrator's annual BEPS Pillar Two Readiness Study, found that 60% of multinationals surveyed are still not prepared for lodging a global or local return.

Vassilieff stressed that the organisations handling the change best are those that started early. "No one ever gets punished for preparing too early. But if you leave it too late, you're in trouble," he said. He cited the example of a global consumer products company that began preparing two years before the rules took effect.

"They set up a working group of tax leads in key jurisdictions globally on how to approach Pillar Two. Initially, the focus was on data capture, but now it's about filing. That early prep has really paid off."

Best practice now, he explained, is ensuring systems are in place. That includes risk assessments, software solutions for calculations, and processes for lodgement across jurisdictions.

Beyond compliance, Pillar Two is reshaping the corporate tax function. Vassilieff said many tax leaders now find themselves managing more data than any other department, raising their visibility with finance chiefs. "Three years ago, tax managers said they were really considered a cost centre. Thanks to Pillar Two, they have a much greater seat at the table," he explained.

At a recent industry event, a tax leader told Vassilieff that his next junior hire might come from a technology background rather than tax. "They said, 'I can teach the tax technical aspect. They can bring the data management piece into the business.' Everyone in the room agreed that's where the profession is heading."

Tax leaders are also being asked to acquire new technical skills. "A tax leader in Singapore told me they are now tasked with learning BI skills, Alteryx and Tableau, because it's a basic requirement to understand the data," Vassilieff said.

One of the key hurdles is the sheer volume and granularity of data needed. CCH Integrator, Wolters Kluwer's tax compliance platform, is designed to ease that burden. "

Anyone who's seen or used the platform would have heard the three Cs: capture, calculate and communicate," Vassilieff said. "It's source data agnostic, so multiple data sources can be ingested into the software." For acquisitive companies running multiple ERP systems, this design provides a single source of truth. "It streamlines the process, removes manual steps and allows tax teams to drill down to jurisdictional and entity-level reporting," he explained.

Feedback from clients has been strong. "The CFO is becoming more interested in Pillar Two because if you need to pay more tax, that's coming out of finance. Having dashboards to see which jurisdictions are safe and where the headaches will come from really helps them," Vassilieff said. For those hoping to put preparation off, the risks are stark. "You may be liable to pay a failure-to-lodge penalty of $825,000 per entity," he warned. "If you have multiple entities, those fines will stack up quickly. And you may face similar penalties in other jurisdictions like Singapore or the UK. It's not a position anyone wants to be in."

He believes it is still possible for late starters to catch up if they act decisively now. That means reviewing existing reporting processes, deciding whether to insource, outsource or co-source, and engaging with peers to share ideas and challenges. Wolters Kluwer, he argued, is well-positioned to support tax teams because of its dual offering of compliance software and research platforms. "We can provide everything that someone in the tax space needs to do their jobs and be compliant," Vassilieff explained.

Looking ahead, he sees growing reliance on technology, but also new opportunities for tax teams to add value. "This is not just about compliance," he said. "It's about bringing additional value to the business through better data and analysis."

And for companies still hesitating, his advice is clear. "No one ever regrets starting early, but if you leave it too late, you'll be in trouble," he said.