Doris 
When getting ready for the adjustments, take into account these five steps, especially if you are working with a CPA in North Dallas, Texas:
1. Familiarise yourself with the organizational chart
MNEs should keep a list of all entities and permanent establishments in their organization chart and information on each one’s location, ownership structure, and tax status. Understanding the specifics of the organizational chart, relationship hierarchies, and structures can help multinational enterprises identify the entities that fall under the purview of the global minimum tax. The global minimum tax laws are such that even entities operating in jurisdictions with statutory tax rates above 15% may have Global Anti-Base Erosion (GloBE) effective tax rates (ETRs) below 15%, even if MNEs may consider restricting the inventory of entities to just “low-tax” jurisdictions.
2. Assess the preparedness of the provision
The financial accounts of an MNE’s constituent entities serve as the foundation for determining the minimum tax under the global minimum tax regime. The MNE will pay a minimum top-up tax to reach a 15% GloBE ETR in the jurisdiction of the member entities’ total GloBE ETR (as determined by applying local legislation’s global minimum tax regulations) is less than 15%.
The GloBE ETR for any jurisdiction is frequently unclear since the minimal tax calculation involves numerous inputs, elections, and entity aggregates per jurisdiction. Predicting which nations will be subject to the Pillar Two top-up tax could be challenging.
3. Increase the precision of income tax reporting
Robust reporting processes and documentation are significant for calculating global minimum tax liabilities and preparing for review by external auditors. Audit readiness, therefore, should be a goal as MNEs examine their processes for the temporary safe harbors and estimated accruals for top-up taxes.
Estimated group tax provision calculations can vary from detailed tax return calculations, resulting in prior-year provision-to-return adjustments that can impact global minimum taxes. Unanticipated provision-to-return adjustments can distort an entity’s GloBE ETR and affect the ability to qualify for the safe harbor provisions.
4. Take disclosures into account
SEC Regulation S-K Item 303 (Reg S-K) mandates the disclosure of prospective information reasonably anticipated to have a material impact on a registrant’s management discussion and analysis (MD&A). Businesses covered by Reg S-K should consider whether it’s necessary to disclose how the GloBE requirements are expected to affect their financial situation and operating results.
5. Keep an eye on current events and be ready for disruptions
The GloBE Model Rules, Administrative Guidance in February 2023, July 2023, and December 2023, Guidance on Safe Harbours and Penalty Relief, a public consultation document on the GloBE Information Return, and a public consultation document on Tax Certainty for the GloBE Rules are just a few of the educational resources the OECD has published on the global minimum tax. More information will be released soon.
Many nations and tax jurisdictions are implementing the global minimum tax, each with its own set of regulations and implementation dates. As a result of these discrepancies, MNEs will have to manage varying and staggered enactments, which will add to the complexity.
Conclusion
An MNE’s specific facts and circumstances determine how the new global minimum tax policy will affect them. After the regulations go into effect, which for many MNEs will be on January 1, 2024, MNEs must modify their tax reporting procedures to account for the impact of global minimum taxes in their accounts. Now is the moment to ensure tax accounting teams are prepared to handle these additional taxes. Proper preparation will ensure seamless compliance and help mitigate any potential financial risks associated with the new tax regulations.
