Response 4 - KPMG

KPMG LLP Audit 15 Canada Square London E14 5GL United Kingdom

Pauline Wallace Chair UK Endorsement Board 8th Floor 125 London Wall London EC2Y 5AS

By email to: [email protected]

Your ref Our ref bg/jg

6 March 2023

Dear Pauline

We welcome the opportunity to provide final comment on the UK Endorsement Board's (UKEB) comment letter to the IASB on Exposure Draft ED/2023/1 International Tax Reform – Pillar Two Model Rules: Proposed amendments to IAS 12 after having participated in the UKEB roundtable held on the matter.

We broadly agree with the drafting of the comment letter in particular with the strong support for the mandatory exception from accounting for deferred tax arising from Pillar Two model rules and the absence of a sunset clause as well as the accelerated timetable.

We understand the concerns raised by stakeholder regarding the disclosure requirements and agree that establishing disclosure principles rather a prescriptive list of disclosure requirements might have resulted in a better standard.

We note however, that it is critical to finalise the proposed amendments to IAS 12 as quickly as possible because some jurisdictions may enact or substantively enact their Pillar Two tax laws before 31 March 2023 and a number of jurisdictions are expected to do so before 30 June 2023. We would not want the amendments to be delayed on the grounds of re-drafting disclosure requirements, the majority of which are intended to only apply in the short term.

We believe that for most entities reference to the general materiality requirements in IAS 1 would be a sufficient guiding line to ensure relevant information is included.

Yours sincerely KPMG LLP

KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Registered in England No OC301540 Registered office: 15 Canada Square, London, E14 5GL For full details of our professional regulation please refer to 'Regulatory information' under 'About' at www.kpmg.com/uk