Pillar 2 hits APAC: What it means for your expansion playbook

Australia's GloBE Information Return (GIR) filing deadline of 2026-06-30 is imminent. Under Legislative Instrument LI 2025/28 (registered 2025-12-22), the ATO has set out limited exemption circumstances for the Domestic Minimum Tax Return (DMTR):

• Certain members of tax consolidated or MEC groups
• Entities not GloBE-located in Australia
• Certain GloBE securitisation entities
• Certain flow-through entities with no Australian DMT liability

For the Australian IIR/UTPR Tax Return (AIUTR), both of the following conditions must be met to qualify for exemption:

1. The entity cannot have Australian IIR liability
2. The entity falls into a category where Australian UTPR liability is nil

Action required: If your group has Australian-located constituent entities and consolidated revenue exceeding EUR 750 million, your GIR filing window closes in weeks — not months.

South Korea's Proposed Enforcement Decree (announced 2026-01-16, promulgated February 2026) brought detailed implementation rules into force. Filing and payment obligations commenced 2026-05-01, with penalties for non-compliance reaching up to KRW 100 million.

Key provisions:

• Domestic Top-up Tax rules with exclusions for certain accounting-recognised taxes and inclusion of stateless PE income
• Transitional Safe Harbour extended by one year — exemption from top-up tax in 2027 if the simplified effective tax rate is at least 17%
• Liaison Office Penalties — a fixed administrative fine of KRW 5 million for failure to submit required status reports

Groups that missed the May filing window face immediate penalty exposure.

Hong Kong launched Phase 1 of its Pillar Two Portal on 2026-01-19, enabling electronic filing of top-up tax notifications via the Business Tax Portal (BTP). Notifying entities must:

• Register dedicated business accounts under BTP
• File top-up tax notifications within 6 months after the last day of the fiscal year
• Address obligations for both the Global Minimum Tax (GMT) and Hong Kong Minimum Top-up Tax (HKMTT)

For groups with December year-ends, the first notification deadline falls in mid-2026.

Here is the insight that catches expansion teams off guard: Accounting & Tax friction is pervasive — even in markets that score well overall.

Hong Kong SAR is widely regarded as one of APAC's most business-friendly jurisdictions. It ranks #10 overall on the Vistra Friction Index. Yet it ranks #2 in the Accounting & Tax friction dimension at 22.9. Entity formation and banking may be streamlined, but the tax compliance burden — now amplified by Pillar Two — creates a hidden drag on operational efficiency.

The pattern repeats across Friction Index markets:

The takeaway: Whether you're entering these markets or already operating in them, your compliance planning must disaggregate friction by dimension. A market that's easy to enter can still be expensive to operate in — and for businesses already on the ground, Pillar Two is adding cost and complexity to structures that were never designed for it. The gap between "set up" and "stay compliant" is widening fast.

What you should do now

1. Confirm your GIR filing status in Australia — the 2026-06-30 deadline is 14 days away
2. Verify South Korea compliance — if you missed the 2026-05-01 filing, engage advisers immediately to mitigate penalty exposure
3. Register on Hong Kong's BTP — the portal is live and notification deadlines are approaching
4. Map your group structure against Pillar Two thresholds — Belgium's CbC notification rules and Austria's DAC9 exchange (live by 2026-12-01) add further reporting layers
5. Request a Friction Index diagnostic — understand where Accounting & Tax friction will compound your Pillar Two burden

Next steps

Download the Vistra Friction Index: Where to Grow, Where to Execute (APAC Edition 2026) for the full Accounting & Tax friction breakdown across 15 APAC markets — including the hidden compliance costs that don't show up in headline rankings.

Contact us.

Data sourced from Global Country Updates (January 2026) and the Vistra Friction Index 2026.