Operating Model Effectiveness and Multi-Hub Models
Our professionals help you design and implement a flexible and sustainable multi-hub model to adapt to the changing tax environment and achieve business benefits.
What EY can do for you
Ongoing worldwide implementation of global tax reforms have presented significant challenges to traditional highly centralized tax models, leading to a surge in tax controversy.
Business changes linked to economic nationalism, changes in mobility during and following the COVID-19 pandemic as well as digital and technological transformation are reinforcing the changes linked to the global tax reform. The convergence of tax and business drivers toward multi-hub models allow tax functions to lead, support and accelerate business transformation projects.
Many multinational companies are now evaluating multi-hub models as a more sustainable long-term operating model. This can create a range of business benefits, such as:
- Greater operational flexibility
- Improved access to talent
- Reduced tax controversy
- Reduced reputational risk
- A more stable and sustainable tax cost
We support you to design and implement flexible and sustainable multi-hub models. A typical project can include:
- Opportunity assessment and cost/benefit analysis
- Transaction design
- Transaction implementation
- Project planning and assurance
- Post implementation compliance and sustainment
When should multi-hub models be considered a priority for you or your business?
Your challenges |
Your profile |
Single entrepreneur models (or multiple sole-entrepreneurs in some cases) that are becoming more difficult to operationalize and/or seeing increasing tax costs |
Firmwide executive leader seeking to develop a holistic cross-function future state business model: the transformation agenda overlaps multiple functional areas and defines the optimum business model of the future |
High levels of tax controversy related to transfer pricing, withholding tax and/or permanent establishment risk |
General counsel, risk officer or corporate relations leader: multi-hub models reduce tax controversy and reputational risk associated with many traditional sole entrepreneur structures |
Reputational risk exposures related to the tax model |
Supply chain leader: the scope to combine complex supply chain re-evaluation with a more aligned global tax model securing tax cost savings can fund, catalyze or accelerate the desired operational transformation |
Pressure on talent optimization due to tax controls on workforce location and/or workforce mobility |
M&A leader: the scale of impact of the tax changes creates winners and losers with under/overvalued tax risks which can be unlocked via M&A. Big-ticket M&A can also be a catalyst for transformation |
Friction between tax and non-tax functions in the organization due to tax-based controls and restrictions affecting business effectiveness |
Operational leader and talent: multi-hub models will improve access to talent and reduce controls related to location of talent and policies related to mobility/physical location of workforce supporting design of "work from anywhere" plans |
Challenges related to alignment between the tax model and the location of risk control and/or DEMPE functions |
Tax VP wanting to be innovative or leading edge: allow tax to play an anchor and/or funding role in the context of wider business transformation trends |
Transfer pricing certainty in uncertain times
Our new survey finds that businesses are prioritizing transfer pricing certainty in an era of global minimum taxes.
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