Tax Technology and Transformation

A significant number of our clients have experienced advantages from implementing AI, with many expecting it to revolutionise tax planning and strategy within the next three years. Organisations can establish priorities and use cases for AI, integrate a technology ecosystem and enhance team skills to fully exploit AI’s potential in the tax function.

Tax functions are under strain due to limited resources, increasing regulatory demands and the need to support strategic business decisions. Organisations can enhance the efficiency of daily tax operations by upskilling teams or hiring for the appropriate skills and expertise, as well as repurposing talent internally to more technology focused roles.

As many organisations continue to ride the business remodelling wave, the operating model discussion is becoming increasingly relevant for tax activities both in the short- to medium-term. They can assess their existing skills, technology and processes to address current and future needs, and balance these requirements against the expertise they can hire, purchase or develop.

Resource constraints often pose significant hurdles for tax functions. The use of the right tools can alleviate these challenges, enhancing the work environment and fostering an innovative, agile team. As the tax landscape evolves, businesses are shifting towards comprehensive corporate responsibility, integrating tax strategies with sustainability goals. The new tax professionals will be key strategic advisors in this transition, leveraging cutting-edge technologies such as AI to gain substantial benefits.

For instance, tax compliance often involves reconciling financial transactions across multiple accounts, which can be labour-intensive and time-consuming. By leveraging self-service data management and low-code tools, organisations can automate the reconciliation, validation and reporting processes. Harnessing the transformative potential of AI can help streamline tax operations, analyse complex and vast datasets, uncover discrete patterns and unlock new opportunities for tax transformation.

Reducing the time spent on existing tax processes can help businesses save resources, which can instead be used for continuous improvement opportunities and enhanced operational efficiency. This is particularly important in a cost-focused environment, allowing organisations to focus on activities with more aggregated value. 

When procuring tax technology, evaluate your existing enterprise platforms. Align your tax function with the scope and timing of ongoing and future transformations and other enterprise investments. Leveraging low-code automation and existing enterprise platforms for tax purposes is gaining traction. Assess whether your current software can be enhanced or modified, or if your business holds technology licenses that the tax team can use.

Integrating tax solutions driven by end-users is a practical approach compared to large-scale enterprise-wide transformation or tax engine implementation projects. Pursuing automation using existing enterprise platforms can be a compelling strategy for cost optimisation.

In today’s rapidly evolving regulatory environment, staying ahead of compliance requirements is not just a necessity but a strategic advantage. By proactively developing and implementing comprehensive data management strategies, clients can ensure they are not only meeting the stringent requirements of obligations such as Pillar 2, DAC7, CESOP and other regulatory frameworks, but are also positioning themselves as leaders in their industry. These strategies enable organisations to streamline their data processes, reduce the risk of non-compliance and enhance their overall operational efficiency.

It is important that approaches encompass data extraction, manipulation, calculation, compliance and reporting obligations. Moreover, a robust compliance framework can significantly boost stakeholder confidence, demonstrating a commitment to transparency and accountability.

Leveraging these strategies effectively can also unlock new opportunities for growth and innovation. By investing in advanced data management tools and practices, clients can gain deeper insights into their operations, identify areas for improvement and make more informed business decisions. This proactive approach to compliance not only mitigates risks, it also fosters a culture of continuous improvement and resilience. Ultimately, embracing these obligations as integral components of your business strategy can lead to sustainable success and a competitive edge in the marketplace.