Accounting Implications of the OECD Pillar Two Global Minimum Tax: A Systematic Literature Review

Abstract

Purpose: The OECD/G20 Inclusive Framework's Pillar Two Global Anti-Base Erosion (GloBE) rules introduce a 15% global minimum effective tax rate for large multinational enterprises (MNEs), operationalised through the Income Inclusion Rule, the Undertaxed Profits Rule, and Qualified Domestic Minimum Top-up Taxes. Because GloBE Income is derived directly from the financial accounting net income used in consolidated financial statements, Pillar Two embeds an unusually deep interdependence between tax law and financial reporting. This paper presents a systematic literature review (SLR) of the accounting implications of Pillar Two, synthesising academic, standard-setting, and professional literature published between December 2021 and mid-2026.

Design/methodology/approach: Guided by a conceptual framework linking GloBE design features, standard-setter response, and accounting and market outcomes, and following PRISMA-informed screening and thematic synthesis, the review adopts a critical realist research philosophy and an abductive approach to qualitative, document-based synthesis.

Findings: The review identifies five interlocking themes: (1) the use of financial accounting income as a tax base and its implications for reporting quality; (2) the mechanics and complexity of the Total Deferred Tax Adjustment Amount; (3) the divergent but currently converged treatment of Pillar Two top-up taxes under IAS 12 and ASC 740, both of which rely on temporary recognition exceptions; (4) disclosure, interim-reporting, and systems-integration burdens; and (5) emerging effects on effective-tax-rate volatility, earnings-management incentives, and capital-market valuation. Empirical evidence on real-world implementation outcomes remains scarce, concentrated instead in conceptual, regulatory, and early observational work, with the first dedicated peer-reviewed SLR on Pillar Two (focused on digital-reporting infrastructure rather than accounting recognition) appearing only in early 2026.

Research limitations/implications: The synthesis is constrained by the limited volume of peer-reviewed empirical scholarship available as of mid-2026 and leans more heavily on conceptual and regulatory sources than a mature-topic SLR would. The paper closes with an agenda for archival, cross-country, and capital-market research that the 2024–2026 implementation period now makes feasible.

Originality/value: This is the first systematic review to synthesise the accounting-recognition, measurement, and reporting-quality dimension of Pillar Two, as distinct from the adjacent and more developed literature on digital-reporting compliance infrastructure, and it offers implications for standard-setters, preparers, auditors, and investors.