Disruptive technologies and unprecedented global transparency are helping to accelerate changes in the way businesses manage tax. In almost every way, the tax function of tomorrow will look very different than it does today.
Having an informed view of tomorrow is vital. Here, EY professionals discuss the future of tax and what it means for companies now.
Digital tax administration — corporate income tax
Tax authorities around the world are using sophisticated digital platforms that require taxpayers to submit data in real time or near-real time. This is changing the way businesses collect, format and report tax information, and it accelerates their reporting and filing obligations.
Watch EY’s Jon Dobell from Sydney, Siew Moon Sim from Singapore and Luise Beltran Farias from Mexico City explain how businesses are increasing using their own technology to comply with new demands and discover analytic capabilities that spot trends, problems and cost-saving opportunities faster.
Digital tax administration — indirect taxes
From invoicing to tax returns, the technological demands by indirect tax authorities are increasing.
Businesses are catching up and discovering how they, too, can use digital tools to improve processes and improve the bottom line by taking steps including working to better collect value-added tax and goods and services tax refunds they are owed.
EY’s Sergio Fontenelle Marques in Brazil and Gwenaëlle Bernier in France explain how these tools can help businesses even as they struggle to comply with a wide variety of data formats required across jurisdictions.
They also look at the impact of the Standard Audit File — Tax (SAF-T) urged by the Organisation for Economic Cooperation and Development.
Disrupting the value chain
Digital disruption is permanently changing value chains, and businesses are wrestling with the tax implications of those changes. Consider: how much profit from a transaction that uses artificial intelligence can be attributed to an algorithm versus a person?
If a product that once was shipped across borders can now be printed instead, where is the tax due?
EY’s Nick Muhlemann and Edvard O. Rinck in Singapore examine how tax rules are struggling to keep up with technological progress, which creates questions and challenges for leading businesses.
Blockchain may be best known today as the technology that underpins the digital currency bitcoin, but it can also be used for a host of other purposes that involve transmitting data securely.
“Blockchain technology represents nothing less than the second generation of the internet,” says Alex Tapscott, CEO of consultancy Northwest Passage Ventures and co-author of the book Blockchain Revolution.
Blockchain is set to transform financial transactions and reporting and, in turn, tax as well. Watch EY’s Michael Meisler and Rod Roman talk about the role that blockchain may play in the future of tax.
Sophisticated but business-friendly analytic tools now allow tax departments to leverage data to manage risks, control costs, identify opportunities and enhance business decisions. At the same time, increasing numbers of tax authorities are using data analytics to mine even more data to help increase tax collections and target compliance initiatives.
In the not-distant future, the deployment of even more powerful data analytics tools will be a mandate for companies, not an option. EY’s Daren Campbell and Carolyn Bailey explain why.
Robotic process automation
Tax compliance work has long involved the manual extraction of data from financial records. Today, robots have arrived on the scene. Software robotics, or “bots,” can automate manual, repetitive, rule-based tasks, freeing tax department professionals to do higher-value activities.
But that’s just the beginning. Watch EY’s Sharda Cherwoo and Hadley Leach describe how robotics fit into the future of tax.