The UK has endorsed the Pillar 2 Side-by-Side arrangement, agreed by the BEPS Inclusive Framework, with implementation in the next Finance Bill for accounting periods from 1 January 2026. The measures aim to provide certainty, simplify compliance for UK businesses, and maintain a level playing field.
The UK Parliament has released a statement from the Exchequer Secretary to the Treasury on 7 January 2026 endorsing the Side-by-Side arrangement for the Pillar 2 global minimum tax, recently agreed by the BEPS Inclusive Framework. Implementation in UK law will follow a technical consultation and will be included in the next Finance Bill, applying to accounting periods starting on or after 1 January 2026.
The UK with more than 140 members of the G20/OECD Inclusive Framework have reached agreement on a package of reforms to the Pillar 2 Global Minimum Tax system.
The reforms deliver on the June 2025 G7 statement, and subsequent G20 commitments, to address how the Pillar 2 system should interact with US minimum tax rules, alongside an evidence-based stocktake process to ensure a level playing field is maintained for all Inclusive Framework members. Further, the reforms provide an important first step on simplification measures for UK businesses, and make wider changes to the design of the framework to support its long-term stability.
Measures to implement this agreement in UK law will be subject to technical consultation and then brought forward in the next Finance Bill. They will apply for accounting periods beginning on or after 1 January 2026.
Earlier, on 5 January 2026, the OECD issued a document with the title Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar 2), Side-by-Side Package.
