Automation within the Tax department: What it means for your team

The rise of technology use within the tax market continues to grow and with this increase in technology comes a growing demand for automation, which has the potential to save time and cut business costs. However, generating interest in automation of any sort depends on how technologically aware decision makers are. Even if you have the budget to invest in systems, processes and technology, do you have the people to manage and develop the software and, importantly, understand the output and implications for the business?

Tax departments need to start considering automation as a viable solution as the likelihood of automatic interaction with the tax authorities gets closer. Blockchain / Making Tax Digital will revolutionise tax return preparation.

We are already seeing the Tax authorities in China & Brazil directly interacting with company systems and this approach is now being considered by more and more countries.

In the next few years, tax authorities will be able to directly interact with your ERP systems. This is how tax compliance will be calculated. There will be disputes over transfer pricing. There will be an increase in ‘sharing’ between tax authorities to learn from each other; how to access systems; find anomalies. CBCR will be a way in for many of them. Tax authorities talking to each other could lead to global audits.

Within the next three years all Heads of Tax will have to conduct a complete review of global tax operations; assess how to leverage tax technology, and build a programme of technology implementation.

Making use of tax technology will have implications on the number of tax staff you need, the necessary roles and what sort of skills individuals will need to possess. We are expecting to see a large amount of change within the traditional tax department. It no longer makes commercial sense to have a Tax team of a certain size, in a certain country, just because it has always been that way! You now need tax staff who are able to work alongside this new technology, monitoring and analysing data output and leveraging results for the business.