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How Tax is leveraging AI - Including machine learning - in 2019

The Fourth Industrial Revolution is already upon us and all around, we’re seeing increasingly fast technological change that impacts our work and life. For Tax and Finance functions AI and machine learning, blockchain and 3D printing to name but a few technologies, are driving innovation and helping businesses deliver. In this exciting edition from The Tax Function of the Future series, we focus on how the tax function can successfully leverage AI and machine learning.

The Digitisation of Tax Compliance

From 2007 to 2012 there were only 5 ‘data-led’ tax compliance obligations in Europe. The rate of adoption has since tripled with a further 24 requirements, including the UK’s Making Tax Digital, in the period up to 2020. So what can multinationals do to ensure their data is robust and systems able to comply with these obligations?

Blockchain in tax: Compliance

As tax authorities around the world digitise their tax collection processes, businesses will increasingly be required to create and maintain many electronic interlinked tax and trade records. In this sixth insight Tom Birch and Michael Taylor consider how blockchain can help make this manageable and meaningful.

Blockchain in tax: electronic invoicing

Is invoicing on blockchain something you’re looking into now or are you more likely to give it a couple of years as it’s still so new? The reality is, it’s already here and with its many advantages, blockchain based invoicing is set to become more widespread, not least because it’s a technology every business can benefit from.

Analytics and tax: Authorities and compliance

In the previous article, we looked at the areas in which data analytics have revolutionised best business practice and now, the tax authorities are catching up. In the BRIC nations amongst many others, there is a trend towards pre-validating transactions before they can be invoiced and in many other countries SAF-T and other similar obligations are also being employed to widen the tax base. Indeed, working in partnership with dynamic software firms, tax authorities around the world are investing in large-scale digital tax compliance programs.

Blockchain in tax: eliminating fraud

Missing Trader fraud, also known as MTIC fraud, and the closely-related carousel fraud are among the biggest problems facing the VAT system. HMRC estimates that the UK public purse loses up to £500 million each year because of them. Across Europe, losses to MTIC has sometimes been reported to be more than the total sum of the EU’s annual budget.

Business need: Have robust and accurate data for the business and tax administrations

Although data is not a new issue for Tax it’s fast turning into one of the major enablers for future state Tax functions. Tax authorities continue to move ever closer to real time data extraction and e-auditing with new legal requirements coming thick and fast. There has never been a greater need for tax departments to be data literate.

Business need: Have confidence and certainty over compliance

Many companies are rethinking their approach to domestic and global compliance and reporting by taking a closer look at their technology, processes, resources, and service providers. Leading tax functions are using co-sourcing/outsourcing as a critical component of Tax function strategy, and as a means to better align Tax function investments and use of talent with organisational goals.