BY Fraser Tennant
The continued globalisation and digitalisation of tax is putting tax professionals under pressure to invest in new technologies, according to a new survey by Thomson Reuters.
In its ‘2019 European Tax Technology Survey’ – which polled 438 tax teams across a wide range of industries, including banking, manufacturing and services – Thomson Reuters reveals that 98 percent of tax professionals plan to invest in tax technology over the next 12 months, compared to only 54 percent in 2018. Moreover, the main driver behind the anticipated investment is the rise in digitally capable tax authorities.
Recognising the need for increased efficiency for internal processes and workflow, 45 percent of survey respondents said that they had started or have plans to implement digital tax filing and compliance for new standards such as MTD and Standard Audit File for Tax (SAF-T) – the international standard for the electronic exchange of reliable accounting data, as defined by the Organisation for Economic Co-operation and Development (OECD).
Key findings from the survey include: (i) 76 percent of senior tax executives have seen an increase in attention on tax compliance and planning at board level; (ii) 28 percent of tax teams plan to increase spend significantly in the next 12 months – mainly to address the needs of digital tax reporting; (iii) managing compliance across multiple jurisdictions continues to be the biggest challenge, although preparing for Brexit had also significantly increased in importance; and (iv) 89 percent consider tax technology as strategic to the success of their tax function, although only 39 percent have a tax technology strategy.
“The survey indicates that many tax departments are looking to centralise and manage compliance across multiple jurisdictions, in response to the continued globalisation and digitalisation of tax,” said Steve Smith, proposition lead, corporates at Thomson Reuters. “The interest in new technologies also suggests that tax departments are recognising that the deployment of tax technology can help increase efficiencies, reduce human error and deliver a consistent and manageable way of addressing these new tax regulations.”
In addition, the survey found that there is an appetite within tax departments to adopt in-house technology, rather than outsource, suggesting a desire to take control of the digital tax transformation process.
Mr Smith concluded: “It is inevitable we will see more jurisdictions following suit in the coming years, and multi-national corporations need to be prepared to address these requirements with future-proofed technology solutions.”