1 minute read 21 Aug 2020
EY - team thinking

4 steps to create an intelligent tax function of the future

By EY Ireland

Multidisciplinary professional services organisation

EY Ireland, a leading global professional services organisation providing assurance, tax, audit, strategy and transactions and consulting services.

1 minute read 21 Aug 2020
Related topics Tax Tax function operations

In this article, Kristine Commons, Tax Technology and Transformation Lead, EY Ireland, discusses how tax functions can embrace change to reshape the future.

ecent global events underline just how important collaboration by people, technology and processes is to respond to crisis and reshape the future. 

We live in a world that is increasingly connected and linked by rapid advances in technology that can connect groups of stakeholders across new platforms. 

Today’s working world demands an intelligent tax function, with a new way of obtaining, processing and using data, bolstered by a new mix of talent, training and technology – all working together to create sustainable long-term growth.

For the tax function, this means responding with speed, accuracy and transparency to a highly complex environment. Tax functions, through full-scale transformation or incremental change, face a number of challenges in embracing disruption.

The EY 2020 Global Tax Technology and Transformation Survey, of 100 of the largest multinationals, offers high-level insights into the current challenges and trends redefining how tax functions must operate. 

1.Close the data and technology gap

The 2020 survey found significant issues with how tax functions extract maximum value from tax data and technology. Data is often called the most valuable raw material, but value can only be derived by determining the right purpose, the data collection strategy, analytical methods and tools and finally by deciding how to put insights to good use. 

As tax authorities strive to implement digital tax administration (DTA), multinationals are being compelled to adapt to more electronic requests and requirements impacting corporate taxpayers.

These changes require filing through digital methods, more information, more real-time filing and the employment of data analytics for risk profiling and auditing. The question we hear from clients is, ‘what can we do to ensure we are prepared for these digital information requests?’ The answer is to continuously review processes and improve the quality of data to ensure readiness and respond by providing accurate information in an efficient manner. 

We are seeing a move towards specialist data cleansing products to improve data quality. Interestingly 70% of companies use decades-old technology but newer end-user data cleansing tools have already been adopted by 51%.  As such, we are seeing more clients leverage analytics for analysing data, identifying risks and opportunities, real-time monitoring and providing reports to key stakeholders.

2.Tailor ERP outputs for tax usage

The need to access specific information in a timely manner makes companies increasingly aware of the inadequacies of ERP systems that haven’t been configured with a tax lens. Multiple spreadsheets are often the symptom of multiple data sources and systems not being set up correctly for Tax. 

The survey found that the majority of companies still spend a significant 40-70% of their time on data cleansing.
4 steps to create an intelligent Tax Function of the future

Another noteworthy area for potential productivity gains is where multiple ERP systems are being used. 93% of companies surveyed are in this position and this leads to huge constraints on time and efficiencies.  For example, companies using between 6-12 ERP systems are spending 44% of their time on data collection, cleansing and manipulation. 

While the tax function cannot control the number of ERP’s it can influence the design and governance of ERP’s. By being involved in the ERP implementation and modernisation process the tax department can ensure that outputs can be tailored for tax usage and in doing so companies have noted realising up to 40% efficiency gains.

3.Use tax reporting software

Tax reporting software is another accessible way to gain efficiencies. Of the companies surveyed, 41% do not use commercial tax accounting software. The companies that do are 50% more efficient. There is a large variety of tax reporting software packages available starting at very accessible price points. These can help to gain efficiencies, manage risk of errors from manual input of data and provide an audit trail at a time when a tax team is often under significant time pressure to meet reporting deadlines. 

4.Improve the tax talent mix

The tax function of the future will need to adapt to the ways tax authorities are administrating tax.  In addition to having traditional technical tax and finance skills, tax functions will also need to have the latest technology and data skills.

The survey indicates that almost three quarters of companies plan to increase their tax headcount with people with data and technology management skills. It is an exciting time for tax teams to be involved in business transformation and build the tax function of the future.


Now is the time to start thinking about tax transformation and how it applies to your function. Small steps in the right direction can lead to significant efficiency gains for your tax team, greater confidence in terms of managing risks and more time to focus on value-add activities.

The time is now to consider how you could leverage data analytics, improve your ERP system, implement a tax reporting solution and work with your team to begin redefining your tax function in the digital age.

How will you reshape the future of your tax function?

About this article

By EY Ireland

Multidisciplinary professional services organisation

EY Ireland, a leading global professional services organisation providing assurance, tax, audit, strategy and transactions and consulting services.

Related topics Tax Tax function operations