Taking tax teams out of Cinderella role helps corporate planning

This article was originally published by Bloomberg Tax via www.bloombergindustry.com on July 20, 2026 and is available here.

Accounting and tax compliance for multinational enterprises is becoming more complicated due to aggressive shifts in regulations and developing global standards. The accompanying demand for transparency is creating sharp short-term compliance challenges, even as digitalization simplifies processes.

Right now, 42% of jurisdictions expect accounting and tax compliance to grow even more complex over the next five years. This shouldn’t be a surprise. The OECD’s Tax Administration 3.0 policy paper — the anchor for modern thinking — is more than five years old and advocates a move toward real-time tax compliance processes, integration with taxpayers’ business systems, and fewer touchpoints.

Governments are responding, seeking greater visibility illuminated by real-time data.

Readjusting to real-time

Governments are accelerating digital tax compliance through real-time data collection and are increasingly demanding more granular reporting, faster submissions and stricter compliance. They use technology to both improve efficiency and strengthen oversight and enforcement.

While these changes promise long-term operational benefits, businesses face immediate challenges in navigating a fragmented regulatory landscape, as countries adopt markedly different models.

The push for e-invoicing is a perfect example of this thinking and an easy sell: No invoicing means no revenue. The goal is to drive more streamlined and efficient operations over time, but compulsory e-invoicing creates challenges during implementation.

Governments consistently ask for more data points at shorter intervals but are inconsistent in what they ask for and when. Despite Belgium and France being neighbors, the e-invoicing model that Belgium introduced in January differs greatly from the planned regime that France scheduled for September.

While e-invoicing increases incrementally, we are seeing tectonic shifts in the tax landscape. Poland is a global pioneer in real-time tax coding for direct taxes such as corporate income tax. The government is aligning direct tax reporting with indirect tax reporting, such as for value-added tax, to treat it with similar real-time digital scrutiny through a continuous centralized transaction control platform.

This was unheard of — such treatment traditionally applied only to indirect taxes. By bringing the second major type of tax into that system, requiring line-by-line coding and visibility, Poland is putting pressure on global businesses operating there, forcing them to reimagine and localize enterprise resource planning, or ERP, platforms, and other systems.

Governments aren’t introducing digital records and processes just to make life easier for taxpayers; they’re doing it to introduce more controls. They’re deploying stick as well as carrot, with more severe penalties for noncompliance as technology enables authorities to monitor and enforce requirements more effectively.

UK authorities are signaling stricter enforcement after years of the Making Tax Digital initiative, characterized by generous grace periods to move to digital reporting. This includes the “blind eye” VAT penalty doctrine, where ignoring a known risk amounts to deliberate conduct and can result in penalties.

Tax authorities are harnessing AI innovations in their investigations. In the heatwaves being experienced across Europe, the French tax authority, for example, is using AI to detect undeclared swimming pools. The initiative, known as Foncier Innovant, uses computer vision AI to analyze aerial and satellite images and cross-checks them with land registries and tax databases to flag any discrepancies. During the pilot phase alone it helped to bring in an additional 10 million euros ($11.4 million) in tax revenue.

Supporting supranational developments

In addition to accelerating digital reporting and expanding e-invoicing mandates, governments are transposing the work of supranational bodies, such as the Organization for Economic Cooperation and Development, to advance global tax alignment.

Multinationals face complex tax rules arising from the OECD’s Base Erosion and Profit Shifting 2.0 project, and particularly the Pillar Two 15% global minimum tax.

While the OECD has developed guidelines, it can’t mandate governments to play ball. Local versions of BEPS are compounding complexity, fueled by the creative interpretation of different governments. While Germany and Ireland implemented the core rules immediately, for example, Malta opted to use a specific derogation under the EU’s Minimum Tax Directive to delay Pillar Two until 2029.

The rollout of BEPS and global minimum tax rules is pushing businesses to adapt tax and reporting frameworks on a global scale, but dealing with fragmented applications of supranational initiatives often requires a major effort.

Tax health check

These trends are here to stay, and momentum will grow as tax becomes more about data and less about functional knowledge. So how can multinationals prepare?

• Plan properly. Stay on top of developments in each market, whether that’s the timing of e-invoicing mandates, direct tax coding requirements or the local interpretation of how to implement global tax rules.
• Find the right balance. Understanding local tax rules is essential. Translating those requirements into standard global processes with appropriate local deviations is equally important. A consistent but rigid global tax process that fails to factor in local complexities jeopardizes compliance, while paying too much heed to local intricacies may lead to tax becoming a bottleneck in digitalization efforts.
• Align tax with the wider finance function. This especially applies for technology projects, such as the rollout of a single ERP system. This is a critical step to simplifying tax compliance by automating data collection, tax calculations, and reporting. Tax experts must be involved in the development, configuration, and assurance of such systems.
• Adopt a proactive tax transformation policy. Future-proof the tax function rather than passively playing catch-up with governments. Tax traditionally has been Cinderella — at home doing the chores on spreadsheets while other departments are dining out with the budget. It’s time for change: Let tax play with the shiny new toys. AI can analyze vast datasets in real time to free up tax professionals to focus on scenario planning and value creation.

Now is the right time to rewire the tax function to better reflect the new landscape.

Copyright 2026 Bloomberg Industry Group, Inc. (800-372-1033) www.bloombergindustry.com. Reproduced with permission.