The global minimum tax has moved from design to compliance. Pillar Two applies a 15 percent minimum effective tax rate to multinational groups with consolidated revenue above 750 million euros. The income inclusion rule and qualified domestic minimum top-up taxes took effect in many countries from 2024, and the undertaxed profits rule generally applies from 2026.
Two developments make this a live question in Azerbaijan right now. First, the first GloBE Information Return for calendar year taxpayers is due by 30 June 2026, so the reporting machinery is no longer theoretical. Second, in January 2026 the Inclusive Framework agreed a side-by-side package whose centrepiece is a safe harbour excluding United States parented groups from the income inclusion rule and the undertaxed profits rule.
For a company in Azerbaijan, the exposure usually arrives from above rather than from local law. If you are part of an in-scope multinational group, your Azerbaijani entity becomes a data source for the group calculation, and the quality of that data determines whether the group can rely on a transitional safe harbour or has to run a full effective tax rate computation for the jurisdiction.
That distinction has real cost. Full computations need adjusted covered taxes, GloBE income, payroll and tangible asset data at entity level, prepared on a basis that reconciles to the consolidated reporting package. Local statutory data alone rarely does the job without adjustment.
Azerbaijan joined the OECD and G20 Inclusive Framework on BEPS in December 2022, and the reporting expectations placed on local subsidiaries by their parent groups have tightened accordingly.
BDO Azerbaijan works with local entities of international groups on Pillar Two data readiness, safe harbour testing and coordination with head office tax teams. Contact our tax specialists to review your reporting obligations.