The OECD’s Pillar 2 / GloBE (Global Anti-Base Erosion) framework presents a pivotal shift in international tax policy by ensuring that large multinational enterprise groups (MNE groups) pay a minimum effective tax rate (ETR) of 15 % in every jurisdiction where they operate. The success of this regime depends not just on reliable rules but also on robust digital infrastructures for data reporting and exchange. From a technical perspective, the success of Pillar 2 relies on the eXtensible Markup Language (XML) schema for the GloBE Information Return (GIR).
Pillar 2 and XML schemas: The digital architecture of global minimum tax reporting
Published Dec 05, 2025 | 4 min read
Christian Neufeldt
Income Tax Consultant, Lucanet
Why XML is the backbone of Pillar 2 reporting
Pillar 2 compliance requires MNE groups to prepare and submit complex sets of data across multiple jurisdictions. These include jurisdictional ETR calculations, income and tax reconciliations, and details of adjustments under the GloBE rules. The volume, granularity, and economic value of this information make traditional reporting formats (such as spreadsheets or PDFs) insufficient for regulatory purposes.
Consequently, the OECD and its members rely upon the XML schema, an established standard in electronic data interchange. This schema provides a machine-readable, structured format that can accommodate diverse data sets while ensuring interoperability between different tax administrations’ systems. An XML schema defines the precise structure, elements, and data types permissible in a Pillar 2 filing, thereby acting as a blueprint for consistency and validation.
From CbCR to Pillar 2: building on proven rails
The use of XML in tax transparency is not unprecedented. Country-by-country reporting (CbCR), introduced under BEPS Action 13, already relies on an XML schema to facilitate the exchange of tax information among jurisdictions. The success of CbCR demonstrates the value of harmonized, digital-first reporting frameworks in reducing administrative friction and ensuring data comparability. Pillar 2 follows this trajectory and builds on the CbCR infrastructure but with significantly greater complexity given the calculations involved.
Standardization as a trust mechanism
However, the adoption of a common XML schema for Pillar 2 reporting is more than a mere technical convenience. It embodies a trust mechanism among (tax) jurisdictions. By relying on standardized structures, tax administrations can confidently parse, validate, and analyze incoming filings without fear of legal or technical divergence. For MNEs, this standardization reduces compliance uncertainty and lowers the risk of duplicative reporting obligations across jurisdictions. In this sense, XML schemas perform an institutional function, embedding interoperability and transparency into the architecture of global tax governance.
The practical challenges for MNEs
Having said that, despite their utility, XML schemas also present challenges. The technical sophistication required to map tax data into a compliant XML structure is significant. Moreover, the schema allows for some flexibility to accommodate jurisdictional variations in implementation. While this is necessary for wide-spread acceptance by domestic legislations, it challenges the concept of a globally uniform format. Finding the right balance will be crucial for the future of Pillar 2. Questions also remain regarding how frequently the schema will be updated and how version control will be managed across multiple jurisdictions and software vendors.
Looking forward, the role of XML schemas in Pillar 2 implementation underscores the deep interdependence between international tax policy and digital infrastructure. Just as the GloBE rules aim to curb base erosion through legal innovation, XML schemas operationalize this ambition by ensuring that tax data flows are precise, interoperable, and globally intelligible.
The bottom line: technology makes the policy real
The success of Pillar 2 will depend not only on political consensus and legal design but also on the technological scaffolding that underpins compliance. XML schemas may seem like a technical footnote, but they are in fact the linguistic medium through which the global minimum tax becomes a functional reality. In the emerging landscape of digitalized tax administration, schemas are the silent architecture of international tax governance.
Christian Neufeldt
Income Tax Consultant, Lucanet
Christian Neufeldt is an Income Tax Consultant specializing in international tax technology at Lucanet. His focus areas include Country-by-Country Reporting (CbCR and pCbCR), Pillar 2, and Qualified Domestic Minimum Top-up Taxes. Christian closely monitors legislative developments to ensure compliance with evolving OECD and EU reporting standards as well as domestic laws.
With a background in tax law and academic publications in global and digital trade law, Christian combines doctrinal precision with technological insight and plays a key role in the development and refinement of Lucanet’s Pillar 2 and CbCR modules and related reporting tools. Prior to joining Lucanet, Christian worked at a tax law firm with a strong focus on the taxation of cryptocurrencies and digital assets. In this role, he collaborated closely with international partners and advised international clients. He holds a law degree from the University of Göttingen in Germany, a master’s degree in international business tax law from Tilburg University in the Netherlands, and a master’s degree in the field of government from Harvard University.