Global tax compliance continues to be major area of concern among CFOs and other finance executives. With the volume and complexity of tax rates and rules across jurisdictions rapidly increasing, along with the velocity of changes, managing compliance has become very challenging.
What makes it so difficult is a combination of factors, including the growth of omnichannel, cross-border commerce, new and increasingly complex tax and reporting rules, and intensifying enforcement activity among jurisdictional authorities. Tax leaders are, of course, well-aware of these challenges – and have their own concerns when it comes to addressing compliance and related priorities.
During a session on tax transformation at our Exchange Conference, we asked IDC Research Director, Financial Applications Kevin Permenter to help shed some light on the nature of these concerns. Drawing from the results of IDC’s SaaSPath Survey, he identified four primary areas of concern among corporate tax managers, including
- Shifting regulations: Tax departments are experiencing difficulties keeping pace with the onslaught of regulatory and compliance changes that occurred in the past year. Plus, regulatory changes in the UK and EU appear likely to have major implications on global commerce. According to IDC’s data, sixty-one percent of the respondents indicated that new e-invoicing compliance requirements in Europe, South America, and other regions will have significant impacts on their tax management processes.
- Harnessing technology: Many tax managers report that their technology tools are not up to the task. According to IDC’s data, more than 53% of tax managers who responded reported that they are extremely open to switching to a new tax management solution
- Disparate data: As more companies deploy additional sales channels and manage increasingly complex supply chains, tax functions are having difficulty accessing all of the data needed to comply with relevant tax rules. This data is often spread across multiple disconnected systems. According to IDC’s data, this challenge is likely to grow, with 35% of respondents sharing that their companies plan to deliver new digital products and services during the next 24 months
- Budget restraints: Despite adapting to unprecedented changes and compliance challenges, many tax managers must cope with resource and/or budget constraints. This forces tax leaders to have to find ways to do more with less.
As cross-border e-commerce activity continues to increase, it will require additional compliance actions to be performed. And with the rise of e-invoicing and the rapidly evolving nature of digital taxation, there are more formidable compliance challenges on the horizon.
While these are daunting challenges, tax automation can help mitigate a number of these concerns. To learn more about how Vertex solutions for Oracle can help your business to add automation and reduce tax compliance risk join us at Ascend 2023, June 11-14, 2023, at the Caribe Royale Resort in Orlando, Florida. There we will host a 30-minute session sharing how our Oracle-certified solutions can help your organization to transform tax and finance, while adding scalability to your business.