The concept of digitising functions and processes has been very much on trend in financial departments of larger companies for many years. Compared to other transaction-related financial functions, tax functions have so far been relatively unaffected by this development. However, it is expected that this will change rapidly in the near future.
Digitising tax functions will lead to automated end-to-end processes that support tax compliance and consultancy. Furthermore, companies will be able to file tax reports “at the push of a button”. Tax departments will therefore be able to implement automated validation procedures (for example, for VAT purposes) or to use mass data of companies for tax purposes. This will enable a high degree of transparency. Officials will also be able to use this digitisation to find better ways of ensuring compliance with tax law requirements and avoiding tax risks.
Officials will also be able to use this digitisation to find better ways of ensuring compliance with tax law requirements and avoiding tax risks. Given the large number of different taxes, such as indirect taxes, income tax, corporate tax, and international taxes, a comprehensive IT tax strategy with individual characteristics for each tax type must be developed.
An important step in digitising tax departments is assessing and selecting the IT solutions to be deployed in accordance with the overall strategy, as well as establishing a “digitisation roadmap”. In addition to the technical implementation of the IT solutions, the processes and organisation must be adapted to the tax function. The rapid digitisation of corporate processes, thus, offers both opportunities and challenges for the tax function.
In this environment, it is of the utmost importance that the tax function takes a proactive role in this digitisation process – this is the only way it can become a significant stakeholder in digitised business processes. The tax function must also change its own operational and organisational processes if it is to cope with the challenges ahead. If it does so successfully, it will benefit extensively from the opportunities offered by digitisation in terms of improving its own processes.
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