Global tax operating models for multinationals

Tax still lands locally

Global tax has traditionally been managed largely through jurisdictional verticals. A French return was dealt with in France, an Irish position in Ireland. Local knowledge is still essential, but there is now a much clearer thread running through the rules affecting multinational groups.

OECD agreements feed into EU measures and domestic legislation. The broad concepts may be shared while countries differ in how they implement them and what additional reporting they require. Multinationals therefore have to manage common international rules through different local systems.

Those rules can also take time to reach the business. There can be a long trickle-down effect from international discussion to legislation, domestic implementation and, eventually, filing.

Pillar Two is a good example, showing how long that process can be. After years of policy development and implementation, Irish entities in scope with accounting periods ending on 31 December 2024 reached their first pay-and-file deadline on 30 June 2026.

The business may have changed considerably during that period. Today, a multinational can enter new markets, move people or functions, acquire a company, reorganise a supply chain or alter an intercompany arrangement, all within a matter of months.

If the tax function sees those developments mainly through the year-end compliance cycle, many of the business decisions may already be in place. In-house finance and tax teams can then find themselves dealing with these changes after the fact which can cause complexities and inefficiencies.

That retrofit consumes internal time as well as advisory cost. For lean tax and finance teams, it can also introduce risks that would have been easier to address while the underlying decision was still being made.

The key is to give the tax function enough visibility to understand what is changing and identify the relevant consequences early enough to act on them.

Simplification addresses the burden

The current EU and OECD simplification programmes identify how much administrative weight has accumulated through successive rounds of international tax reform.

In June 2026, the European Commission proposed a package to simplify EU direct taxation and administrative cooperation. It targets overlapping and overly complex rules, duplicate reporting and other administrative requirements. 

The OECD has taken a similar approach within Pillar Two, including a Simplified Effective Tax Rate Safe Harbour and an extension of the Transitional Country-by-Country Reporting Safe Harbour for future years.

The compliance burden has become substantial enough to warrant policy intervention. Removing duplicate reporting and simplifying calculations should reduce unnecessary work for multinational groups. But it does not remove the connections between the business activities those rules are designed to tax.

A change in a supply chain can affect transfer pricing and VAT. Moving a function can alter how profits are allocated and raise questions about where people work. An R&D investment can involve incentives, Pillar Two and decisions about where activity and talent are located.

The wider tax discussion reflects the same pattern. Transfer pricing depends on where functions are performed and how entities are compensated. With the broader adoption of e-invoicing, VAT is being further integrated into ERP systems, invoicing and transaction data. Incentives and credits require an understanding of the work being carried out by engineers, scientists and software teams as well as its tax treatment.

Each discipline has its own technical rules, but they can be looking at different consequences of the same business decision. 

A central view, applied locally

To address these challenges, multinational tax functions need a consistent global view of how the group operates and complies with its global tax requirements. 

A shared factual base does not mean producing one tax answer for every country. Domestic law and local tax authority practice will continue to determine the treatment in each jurisdiction. What matters is that the different answers begin from a consistent account of the business.

The same transaction or function may appear in transfer pricing documentation, VAT reporting, corporate tax filings, Pillar Two calculations or an incentives claim. The treatment may differ, but the underlying facts should be capable of being reconciled.

Country-by-country reporting, Pillar Two and wider information exchange create more opportunities to compare what a group reports across taxes and jurisdictions. Businesses need to understand where that data comes from and whether it is consistent across those different filings.

A local finance team will understandably focus on its next domestic obligation. The group tax function needs enough visibility to understand how that information connects with positions being taken elsewhere across the group.

It also changes the value of generic tax updates. Businesses already have information coming at them from every direction. Knowing that another tax measure is coming down the tracks is only useful if the business can quickly identify how it applies to its own structure, people, systems or plans.

The more useful questions are specific: Which parts of the group are affected? What facts and data will matter? Does an existing arrangement need to be reconsidered? When should specialist or local expertise be brought in?

Answering those questions, with advisors who can support you with a global solution, with across tax solutions but while also understanding your commercial environment, will mean you can operate effectively in real time alongside business decisions.