Tax Transformation Trends 2023
Digitalisation, automation, data. Tax transformation trends in 2023 and the future outlook
About the survey
Deloitte conducts the same survey every two years, detailing the views and perspectives of more than 300 tax and finance executives from around the world, as well as examining how tax departments are undergoing fundamental transformation in response to changing environments and demands.
This year’s report shows that tax and regulatory changes, such as the OECD’s Pillar 2, ESG and indirect taxes, are motivating companies to address long-standing data challenges. Many companies are outsourcing to access the technology needed to comply with ever-changing tax regulations.
“More and more often, people and teams from other departments – across the whole company –and sometimes even experts from outside the company cooperate on tax-related activities. I am convinced that with increasing digitalisation and automation, tax departments cannot do without close cooperation with IT professionals and data analysts,” thinks Jaroslav Beneš, Director and CTO in Deloitte’s Tax & Legal Department, who is behind the birth of several tax technology tools such as taxCube or Maják (Lighthouse).
Overview of tax trends in 2023
Comprehensive data and technologies enable effective tax reporting
Ensuring that tax reporting is in line with the dynamically changing regulations and tax environment is growing in importance. All of this will be reflected in the priorities and challenges tax professionals will be facing over the next three to five years. Increasingly, they will need accurate and timely tax-related data, which will be integrated across the business, whether it is global tax liability calculation, OECD Pillar 2 compliance, ESG or assessing indirect taxes payable in relevant jurisdictions.
Efficiency is no longer the main priority, but it is still important
Although the need to respond to changing tax laws and regulations has topped the tax managers’ to-do list, achieving greater efficiency remains an important goal. When asked about priorities for the coming years, 31% of respondents cited increasing efficiency or reducing operating costs – the fourth most common priority out of 12.
Frequent use of outsourcing, mostly to access technologies
Outsourcing is the primary strategy for one or more tax activities for nearly three-quarters of firms. It has long been seen as a way to increase efficiency, but access to technology tools is now an even more important factor in why firms are reaching for it. This is because it offers the opportunity to gain access to world-class and constantly updated tax technology without having to make significant capital investments to develop these systems internally .
Taxes are no longer processed only in the tax department
Since 2016, companies have continued to shift core activities away from tax departments - in most cases to other parts of the finance department, to shared service centres or to external providers through outsourcing.
Essential skills for the future or the “hybrid tax professional”
When asked in which area their tax department will need skilled staff the most in the next three to five years, respondents most frequently cited data analytics and management or data-driven strategic insights (44%). This is linked to the growing importance of data-driven decision-making, as well as increased demands from governments and authorities for direct access to corporate tax data.
"The survey results highlight new challenges for tax teams. The digitalization and automation of taxes or European regulations will place higher demands on taxpayers and encourage them to work more agilely within the firm. To achieve their goals, managers will need to manage diverse teams, integrate technologies for direct access to data, and continuously re-evaluate their operating models to maintain the optimal mix of in-house capabilities and outsourced technologies and tools. As a result, tax teams will need to focus much more on both data management and analytics and technology per se. Moreover, with current developments, I expect this trend to accelerate even further," adds Jaroslav Beneš of Deloitte.
