Pillar 2 Side-by-Side Rules (2026)
Nadia Lodroman | Oracle EPM Consultant | Integrity in Every Insight.
12 January 2026
Listen to Tresora and Ledgeron's chatting about this blog post:
Why Oracle TRC & Narrative Reporting are Essential
The European Commission’s notice on January 12, 2026, officially endorsing the OECD’s Side-by-Side (SbS) Package, marks a significant milestone in the global minimum tax journey. While the package introduces much-needed simplifications—including the permanent Simplified ETR Safe Harbour (SESH)
and the SbS Safe Harbour
for U.S.-parented groups—the compliance burden has shifted rather than vanished.
As an Oracle EPM Consultant specialising in Tax Reporting
and Narrative Reporting, I’ve seen how these "simplifications" can be deceptive. Here is why Oracle TRC
and Narrative Reporting
are more critical now than they were before the safe harbor release.
1. Safe Harbours are an Election, Not an Exemption
The most critical takeaway from the SbS Package is that safe harbors are not automatic. They are elections that must be proven and reported.
- The Filing Requirement Remains: Even if a jurisdiction qualifies for the Simplified ETR Safe Harbour (SESH), the MNE Group is still required to fulfill its reporting obligations under the GloBE Rules.
- Ongoing Reporting: You must still demonstrate that your "Simplified ETR" is at least 15% (or 17% for the extended transitional period) using audit-ready financial data.
2. Why Oracle TRC is Still Your Foundation
To elect a safe harbor, you first need to know you qualify.
- Fresh Modelling: The SESH requires new modelling of jurisdictional outcomes to ensure you don’t accidentally fall into a top-up tax position. Oracle TRC allows for this rapid scenario testing .
- Hybrid Compliance: Most global groups will operate in a "hybrid" state—some jurisdictions will be in safe harbor, while others will require full GloBE calculations. Oracle TRC handles this complexity seamlessly within a single auditable structure .
3. The "Last Mile": Narrative Reporting as the Essential Extension
While TRC crunches the numbers, Oracle Narrative Reporting
is what gets you across the finish line.
- Producing the Reports: The filing requirement means you still need to produce high-quality, presentation-ready compliance reports for tax authorities and stakeholders .
- Combining Data and Commentary: Narrative Reporting allows you to pull live data from TRC and combine it with the qualitative explanations required for safe harbor elections and Pillar Two disclosures .
- Efficiency: Instead of manual copy-pasting into Word or PDF, Narrative Reporting automates the production of the GloBE Information Return (GIR) or local jurisdictional filings, ensuring consistency across all documents .
Conclusion: Streamline, Don’t Just Simplify
The SbS Package is a welcome development, but it doesn’t eliminate the need for robust tax technology. My experience implementing Oracle Tax Reporting and Narrative Reporting has shown that the best results come from a unified approach: use TRC for the data and Narrative Reporting for the compliance delivery .
Is your reporting process ready for the 2026 Side-by-Side requirements?
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