Pillar Two and asset and wealth management: from compliance to competitive advantage

Pillar Two is reshaping the tax landscape for asset and wealth managers. A global minimum effective tax rate of 15%, combined with new multi-jurisdictional compliance obligations, marks a structural shift in transparency, reporting and governance expectations. Drawing on insights from the PwC Global Reframing Tax Survey 2025 and our experience across financial services, this article explores how asset and wealth managers can position tax as a driver of resilience, investor confidence, and long-term value.

The PwC Global Reframing Tax Survey 2025 findings show that 95% of financial services organisations expect Pillar Two to have a noticeable impact, with 55% anticipating a major shift.

This is not incremental change. It’s systemic. For large, internationally active groups, Pillar Two alters how tax risk is measured, governed and communicated.

Pillar Two applies to multinational groups with consolidated revenues of at least EUR 750 million. In scope groups must ensure a minimum effective tax rate of 15% in each jurisdiction in which they operate, with top-up tax collected through domestic minimum top-up taxes, the income inclusion rule (IIR) or the undertaxed profits rule (UTPR).

For many investment funds, the direct financial impact may be limited due to investment entity accounting. However, complexity arises where:

• Funds prepare consolidated financial statements exceeding the revenue threshold
• Investment funds are financially consolidated by controlling investors
• Structures involve separately managed accounts, insurance owned funds, seed investors and, wealth management vehicles

In these cases, top-up tax may arise at fund or investor level depending on jurisdictional implementation.

Even where the top-up tax of funds is nil, compliance obligations such as registration, notification and global or local filings (such as the GIoBE Information Return) may still apply. Minority interests can also create unexpected consequences around distributions and capital gains.

Private equity structures add further complexity. Portfolio companies may be in scope, requiring coordination between fund managers and management teams. Pillar Two is now a due diligence focus on exit scenarios, with buyers scrutinising global data quality and tax modelling assumptions.

This is no longer a narrow tax question—it is a governance, structuring and investor relations issue.

For most asset and wealth managers, the toughest part of Pillar Two isn’t interpreting the rules. It’s bringing together, checking, and modelling the data you need across multiple jurisdictions, entities, and investor types.

Effective tax rate calculations require granular financial data that was never previously gathered in a single, consistent way. Without robust processes, compliance risk increases, and investor communication becomes reactive.

Technology is therefore central:

• Automated data extraction and validation
• Integrated modelling tools and calculation engines for effective tax rate and top- up exposure
• Scenario analysis supported by advanced analytics and GenAI
• Alignment with other frameworks such as EU public country-by-country reporting (CbCR) and CSRD

Pillar Two is acting as a catalyst. It is accelerating the need for integrated tax and finance systems and pushing tax functions closer to enterprise data architecture.

The opportunity is not just to comply. It is to redesign the tax function for a more transparent, data‑driven environment.

Reassess fund structures

Identify potential exposure across entities and territories. Model alternative structuring scenarios, and provide clarity to investors in offering documents and disclosures.

Strengthen governance and capability

Embed Pillar Two within enterprise risk management frameworks. Upskill tax and finance teams to manage new data and reporting requirements.

Invest in scalable technology

Deploy tools that support safe harbour analysis, data consolidation, top-up tax calculations and global and local compliance. Make deliberate choices that align Pillar Two implementation with broader reporting transformation.

Leverage external support strategically

80% of organisations plan to increase reliance on external providers. The differentiator will be partners who combine technical expertise, global policy insight and, technology enabled delivery.

Pillar Two represents a structural shift in global tax governance. For asset and wealth managers, the question is not whether to comply, but how to do so in a way that strengthens trust and supports capital allocation decisions.

Firms that invest in strong data, connected systems, and clear investor communication do more than meet their obligations. They strengthen transparency, cut the risk of disputes, and build a more resilient reputation in a market where tax is firmly tied to sustainability, governance, and long-term value.

Pillar Two is more than a new rule set, it’s a trigger to modernise the tax function and embed it as a strategic lever within the organisation.

Discover more insights:

• Read our latest thought leadership on how embedding finance and accounting at the core of Pillar Two, organisations can unlock value and build resilience.
• Learn more about our Pillar Two Data Suite and PwC Pillar Two Engine and how it can support compliance at scale.
• Explore our latest PwC Global Reframing Tax Survey and PwC Global Compliance Survey for executive perspectives on Pillar Two and regulatory transformation.