Governments around the world are becoming increasingly tech-savvy in their drive to increase compliance and generate revenue. The push for global tax transparency is moving full steam ahead and encouraging tax authorities to create legislation to ensure that digital business activities are taxed fairly. When it comes to matters such as transfer pricing, these realities create a challenging environment for corporate tax professionals. Read the following whitepaper to understand what the digitalization of tax authorities means for transfer pricing, and how technology can give tax departments a competitive edge in a challenging and capricious landscape.
The Convergence of Digitalization and Tax LegislationHow can tax authorities use technology to their advantage? Tax legislation around the world is evolving, along with the technology being used by governments and tax authorities. This is causing a significant impact on the way taxpayers must comply with legislation laid down by the authorities. Many countries are investing in advanced data analytics platforms for the purpose of increasing compliance and reducing fraud. As tax authorities see a significant ROI on the investments in the form of increased tax revenue, the trend will definitely continue. Global tax legislation and digital initiatives driven by tax authorities will accelerate in the coming years. By taking advantage of technology, they can adapt to legislative changes in real-time and identify opportunities and potential challenges.
Staying Ahead in a Challenging Tax LandscapeHow can technology benefit the processes of transfer pricing? Most organizations deal with the same set of challenges when it comes to transfer pricing. Some of them are listed below:
- Manual processes that are not agile enough to adapt to changing regulations
- Data distributed across different locations and systems
- Heightened scrutiny by tax authorities as they use technology to their advantage
- Use data analytics for the purpose of documentation review from a tax authority perspective
- Model scenarios for the best possible outcome in a seamless and centralized manner
- Convey a consistent transfer pricing theory to automate and streamline functions
Technology as a Foundation for ChangeHow can organizations stay one step ahead? Technology is clearly the central theme running through the changing approach of tax authorities and legislative initiatives. The use of software solutions to improve transfer pricing processes is no longer an option for tax departments but a necessity.
Key Takeaways from the Whitepaper "What the Digitalization of Tax Authorities Means for Transfer Pricing"
- Understand how digitalization and tax legislation converge
- How to stay ahead in a complex tax landscape
- How technology can be used as a foundation for change
- How to use data analytics for documentation review for tax purposes