With Pillar Two compliance deadlines approaching fast, business leaders can turn a new legal obligation into a competitive advantage by reimagining their approach to tax governance and refining or redesigning their target operating model. To meet Pillar Two requirements, companies must generate, gather and manage more data than ever before. The ability to leverage these expanded data sets can become a business advantage, transforming a regulatory burden into an opportunity for short and long-term planning and strategic business restructuring.
Strategic implications of Pillar Two compliance
For multi-jurisdictional businesses, tax compliance has traditionally been a significant yet manageable aspect of multinational operations. However, with the introduction of Pillar Two requirements, the landscape is undergoing a seismic shift. This framework part of the broader BEPS initiative developed by the OECD, imposes a minimum tax rate of 15% on multinational entities. This development is not just a routine change; it represents a fundamental transformation in how businesses approach tax obligations across international borders.
As businesses scramble to adapt to these new rules, the additional workload is undeniable. Companies are now facing the daunting task of gathering, generating and managing more data than ever before, necessitating significant enhancements in their IT and tax technology infrastructures, as well as overall data gathering processes. These data sources are also more varied and no longer restricted to traditional enterprise resource planning (ERP) sources such as trial balances and general ledger accounts.
How can Pillar Two compliance offer new business opportunities?
This article explores how business leaders can turn Pillar Two compliance into a competitive advantage by innovating their tax governance frameworks and utilising expanded data sets for strategic planning and restructuring efforts.
