The world is moving. Rapidly. And in multiple directions simultaneously. Climate transition, the AI revolution, geopolitical shifts, demographic changes and social instability — these are not trends that emerge one at a time, neatly and manageably. They collide, reinforce one another and redraw the playing field for virtually every industry. At PwC, we call this Reinvention — and at its core, it is about one single thing: companies that dare to transform their business models win, while those that wait and see risk being overtaken.
The figures speak for themselves. In PwC’s latest Global CEO Survey, 42 per cent of CEOs state that their companies have begun competing in entirely new sectors over the past five years. Half are planning international investments in the year ahead. At the same time, geopolitical uncertainty and tariff changes cast a fog over decision-making, with 32 per cent of CEOs saying that uncertainty makes them less inclined to make major new investments. It is a paradoxical reality: one must move forward, yet the terrain has never been more difficult to navigate.
So what does all of this have to do with tax? Short answer: everything.
The tax function that failed to keep pace
It is easy to underestimate the tax function’s role from a more strategic perspective, where it is no longer enough to file returns on time, manage audits and maintain transfer pricing documentation. Compliance and risk management have been, and of course remain, entirely central areas of responsibility. But if the tax function’s ambition stops there, a problem arises.
When the business model changes fundamentally — new markets, new products, new ways of delivering value — the operating model must keep pace. And tax has an essential role in every dimension of that transition. Otherwise, there is a risk that the tax function, if it fails to evolve, becomes a bottleneck that slows transformation. Not because it is doing things wrong, but because it is doing too little, too late.
Five areas where tax plays the leading role
The concrete implications of the Reinvention agenda become clear when we look at the dimensions of the operating model that are actually changing. Here are five areas where tax should not merely be in the room, but own parts of the conversation.
Organisational design and governance. When companies reorganise, relocate operations or establish new corporate structures, immediate consequences arise for corporate tax, withholding tax and transfer pricing. Which locations perform strategic functions versus routine activities fundamentally shapes how transfer pricing lands and which tax incentives can be utilised.
Supply chain and procurement. Free trade agreements and tariffs in constant flux mean that tax must be involved in co-owning decisions regarding the supply chain’s origin, routing and customs classification. Every change to procurement flows triggers customs duties, VAT treatment and potential carbon border adjustment costs.
Product and revenue models. Digital services, subscription models and platform revenues are changing the treatment of indirect taxes and reporting obligations across all jurisdictions. Licensing of intellectual property and platform models requires well-considered holding structures and smart incentive strategies for research and development.
Data and compliance architecture. Authorities worldwide are moving towards real-time digital reporting, which means that the operating model must incorporate tax-relevant data collection at the point of transaction. Tax needs to own and govern the data pipelines that feed compliance, reporting and planning — and connect strategy, industry context and data management into a cohesive capability. The same system upgrades that serve ecosystem partners must also serve tax compliance and planning.
People and competence. Relocation of functions and talent triggers employer contributions, social security, personal taxation and immigration considerations that must be managed proactively. However, it is not only about the employees in the business — tax experts themselves must evolve. From technical compliance specialists to strategic advisers with expertise in digitalisation, automation, AI and sustainability.
From reactive to proactive — a new mission for the tax function
The core of the Reinvention perspective for tax concerns a fundamental shift in positioning. Tax must evolve from reactive advisory to a proactive strategic capability that is embedded in every major business decision. This means that the tax function should not merely respond to questions already posed, but be involved in formulating the questions from the outset.
PwC’s CEO Survey confirms that companies that move furthest and fastest in transforming their business and operating models outperform their more hesitant competitors. This applies internally as well: tax functions that take their place at the strategy table, that invest in the right data, the right competence and the right technology, will be those that create real value — not merely protect it.
What does this mean for you?
If you are part of a management team and considering how your company should navigate the upheavals of the coming years, ask yourself this question: Is our tax function built for the world we are entering, or for the one we are leaving behind?
Standing still is the most risky strategy. This applies to the business model at large — and equally so to tax. Companies that act, transform and reconfigure their operating models outperform those that wait. The tax function must be part of that movement.
At PwC, we work every day to help companies make precisely that journey — to move from a tax function that manages the past to one that shapes the future. Get in touch and we will talk more about what Reinvention means for your particular business.
