“Businesses are facing a whirlwind of upheaval and change, from green transition and digital transformation to the impact of geopolitical tensions, talent shortages and supply chain bottlenecks. OECD Pillar 2 cuts across all these trends and challenges. Addressing the impact of the tax shake-up right through the key areas of people, processes and technology is therefore critical in future-proofing strategies and operations for the opportunities and threats ahead,” says Aisling O’Keeffe, associate director, business consulting at Grant Thornton Ireland.
The business response to the prevailing disruption ranges from tactical adjustments to supply chains to an overhaul of recruitment and retention strategies. Companies may also be looking at more fundamental shifts in their business model and purpose. For example, digitisation is pushing more commerce online and opening up new platform and subscription service models. In turn, the growing focus on sustainability, social inclusion and other environmental, social and governance (ESG) priorities raises questions over what the organisation is in business to do and how it judges success.
Four key business imperatives for Pillar 2
So where does tax – and specifically OECD Pillar 2 – come into this transformation equation? Drawing on what we’re seeing in our work with a wide range of multinational enterprises (MNEs), four key business imperatives are coming to the fore:
Time to mobilise on Pillar 2
Pillar 2 is emerging as a critical test and differentiator for MNEs worldwide. Businesses with the confidence, agility and knowhow to build the operational and business model changes required by Pillar 2 into their wider strategy for transformation will increase resilience and minimise disruption. In short, acting today will make tomorrow easier and increase competitive advantage.
In the third and final article in this series, we’ll be setting a five-point action plan for getting to grips with Pillar 2.
Gearing up for Pillar 2: Five actions businesses can take now
For support on Pillar 2 implementation, contact your local Grant Thornton team, or one of the contributors below.
Stay ahead of international tax changes
Those with the confidence, agility and knowhow to build operational and business model changes, required by Pillar 2 and other international tax changes, into their wider business strategy will increase resilience and minimise disruption when the changes happen.
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