The power of partner ecosystems in today’s tax landscape

Tax has never been straightforward, and effective tax management is certainly not an easy task. But recent years have seen tax professionals face additional mounting pressures, including complex regulations, such as the OECD’s Pillar Two mandate. This has meant tax teams are expected to do more, at a faster pace, and on a global scale.

However, the pressure to deliver results faster need not lead to panic. Tax departments don’t have to sacrifice growth in order to meet regulatory requirements. They just need to look for new ways to scale while achieving compliance. Partner relationships have long been one way of doing this.

But as the tax landscape and technology evolve, more options are available for businesses to take a new and more flexible approach to the traditional partnership model.

Partner ecosystems benefits

Partnerships pay dividends to the growth and success of an organization. Rather than stretching internal teams beyond their limits or attempting to build expertise in every discipline, they allow companies to align with specialists who bring added knowledge and insight. The right partners can fill the capability gaps that would otherwise stall progress. Crucially, they do so without bloating headcount or sacrificing quality.

Traditionally, these partnerships have been built around outsourcing, where companies rely heavily on a chosen partner and their technology, often with little oversight into progress. This worked well whilst technology did not allow for a more collaborative approach, but it was inflexible and finite. If the relationship ended, corporates lost access to the progress that had been made, as it was typically hosted on the partners’ servers and technology.

However, a new partnership model is emerging that offers a different approach. Coined ‘partner ecosystems’, it is designed to bring a wider network of businesses together. Instead of being locked into one firm’s services, businesses are given the flexibility to select a wide range of partners to bring on board. Each partner brings their distinct skillset to the table: that might be regulatory understanding, advanced implementation skills, or change management capabilities. This gives companies far greater choice, enabling them to build a comprehensive ‘best of breed’ solution for their tax management that works in practice and not just on paper.

Aligned with a robust technology platform, partner ecosystems follow a ‘co-sourcing’ approach. This allows businesses to outsource only the tasks and responsibilities that they are not equipped to handle in-house and work collaboratively with their partners to get the job done. Crucially, thanks to today’s modern cloud solutions, each party works from the same data set, enabling the corporation to maintain control, oversight, and access to its data and tax management in a way that the traditional outsourcing model did not allow. Where tax teams would have previously had to chase their partners for updates, they can simply log in to the platform and monitor progress themselves.

Pillar Two use case

The power of partner ecosystems in action is clear when it comes to Pillar Two compliance. The OECD’s global minimum tax regime, targeted at multinational enterprises with consolidated revenue above €750 million, brings with it intricate reporting obligations and tight implementation timelines. For most companies, compliance with the global framework, from initial scoping through to filings, is not possible without a broader network of expertise that spans multiple jurisdictions. The operational lift and knowledge required are too large for one organization to handle.

Through a cohesive partner ecosystem, companies can receive support with whatever aspects of compliance they need most – whether that is understanding the complexities of the regulation, sourcing and organizing data or simply reviewing the filings at the end of the process. Partners can also provide valuable insight into recommended tax data management practices. For example, Pillar Two exposes previously hidden interdependencies between tax reporting processes, specifically provisioning, country-by-country reporting, and transfer pricing. With this awareness, partners can drive efficiency and avoid duplication of efforts, which companies may not recognize when navigating the complex compliance landscape alone or in silos.

Significantly, the partner ecosystem model allows businesses to select the best partner for each step of the journey, rather than relying solely on one provider. The collaborative nature of the partner ecosystem means that all partners will work together to create a seamless process and build the full-spectrum capability needed to navigate this new tax landscape confidently.

Building for growth

A mature partner ecosystem doesn’t just improve tax management but enables growth. By leveraging external expertise, businesses free up capacity to focus on the high-impact work that drives outcomes and adds business value. It also provides the flexibility to pivot quickly, move into new markets, and respond to shifting regulations without the lag of internal upskilling.

The most successful ecosystems are grounded in shared values, mutual trust, and clear roles. The agility gained from this model cannot be overstated, particularly in an environment where speed, adaptability, and scale are essential. Building a scalable and flexible partner ecosystem is vital to navigating and succeeding in today’s complex and fast-paced tax landscape.