Global fiscal closing under new rules
As the fiscal year draws to a close, multinational companies face a decisive moment: ensuring cross-border tax compliance and preparing reports that meet the requirements of multiple jurisdictions simultaneously.
In today’s regulatory environment — marked by the implementation of initiatives such as the OECD Pillar Two, increased tax data integration, and digital audits — year-end closing is no longer just an accounting process. It has become a strategic stage that defines risk, efficiency, and the credibility of international operations.
In this article, the Drummond Advisors team highlights the main points of attention for globally structured companies and shares best practices for a secure and efficient fiscal year-end closing.
1. Reviewing international structures and double taxation risks
Before closing the books, it is essential to review the company’s legal and operational structure. With the new global minimum tax rules and differing Transfer Pricing interpretations across countries, the risk of double taxation or loss of tax credits has increased.
Best practices include:
• Assessing double taxation treaties and identifying tax relief opportunities;
• Reviewing the allocation of revenues and costs between headquarters and subsidiaries;
• Verifying whether entities in low-tax jurisdictions have sufficient economic substance;
• Updating Transfer Pricing policies according the IRS and the foreign jurisdictions
An annual tax diagnostic helps anticipate adjustments and prevent liabilities that may arise in future audits.
2. Meeting deadlines and local tax obligations
Each jurisdiction follows its own tax calendar. In the United States, for instance, the IRS requires filing of forms such as 5471, 1120-F, and FBAR for foreign companies, while in Brazil, filings such as ECF, ECD, and the CBE (Declaração de Capitais Brasileiros no Exterior) are essential.
For the 2025 year-end, global companies should pay attention to:
• U.S. federal and state obligations (including Sales Tax Nexus and State Returns);
• Reporting for controlled foreign corporations (CFCs) and affiliates;
• Updates to local registrations and licenses;
• Financial statements under IFRS or US GAAP;
• Compliance requirements for special-purpose entities (SPEs) and international holdings.
Centralizing this information within a unified tax governance structure facilitates monitoring and reduces the risk of inconsistencies.
3. Documentation and audit: transparency as a priority
Global pressure for tax transparency and traceability has grown significantly. Organizations such as the OECD and the IRS have intensified data sharing and reporting requirements for international financial flows.
Companies should ensure that:
• Country-by-Country (CbC) Reports are up to date and consistent with financial statements;
• Supporting documentation exists for intercompany transactions;
• Accounting and tax records are aligned with local Accounting and Tax requirements, where the company is based;
• Internal policies include compliance reviews and preventive audits.
A lack of robust documentation can lead to tax reclassifications and significant penalties.
4. Accounting consolidation and data reconciliation
For corporations with multiple subsidiaries across different countries, consolidating financial data can be challenging. Differences in time zones, currencies, and accounting standards require careful reconciliation — especially when reports are used for tax and international audit purposes.
To ensure consistency:
• Standardize chart of accounts across entities;
• Use integrated ERP systems and cloud platforms;
• Automate intercompany balance reconciliations;
• Maintain well-documented and traceable internal controls.
Integration between accounting and tax is the foundation of a successful global closing.
5. Tax planning for 2026: a strategic outlook
Year-end closing is not only the end of a cycle but the beginning of planning for the next one. Global companies should take this opportunity to:
• Identify opportunities for tax efficiency;
• Assess the impact of legislative changes, such as the One Big Beautiful Bill and Revenue Procedure 2025-28
• Review profit repatriation policies;
• Restructure supply chains and intercompany pricing models to match new regulatory realities.
A well-structured annual tax plan strengthens governance and promotes the long-term sustainability of global operations.
Conclusion: preparation is the key to international compliance
Cross-border tax compliance has become a competitive advantage. Companies that plan ahead, maintain strong governance, and follow international accounting and tax standards are better protected against fiscal risks, audits, and penalties.
At Drummond Advisors, our multidisciplinary team — composed of experts in accounting, tax law, and international structuring — supports companies in every aspect of cross-border tax compliance, from planning to year-end closing.
If your company operates globally, now is the time to review your practices and ensure full compliance.
Contact our specialists via the chat or email info@drummondadvisors.com to learn how we can help your organization close the year with confidence and tax efficiency.
Written by Marcos Ferreira, Content Analyst at Drummond Advisors, and Maikon Luiz, USA Coordinator at Drummond Advisors