Governments are leveraging technology to increase tax revenues and crack down on fraud and compliance errors. This trend is most evident in the number of new ‘data led’ compliance obligations being imposed on the taxpayer. These obligations are burdensome and expose the transaction level information to the regulator. As a result, the records submitted and retained in case of audit, need to more accurate than ever before.
Multinational companies must ensure they are able to meet these new requirements, making sure their data is good and the systems are able to generate the necessary information. Using a piecemeal, reactive, by territory and by obligation methodology is inefficient and risky. Multinationals are now acting strategically in how they tackle the challenge, investing in regional and global practices and software stacks, to be able to cope now and in the future.
What is this about?
There are three main types of data-led obligations being imposed by the authorities:
The implementation of these regimes and digitisation has been hailed a success by every treasury where it has been adopted - and with the ease of implementation for each tax authority increasing due to technology advances, this trend will continue.