Three strategies to prepare tax teams for 2025 year-end

Incorporate Generative AI in 2026 planning

The integration of Generative AI (GenAI) into tax processes is no longer a futuristic concept; for many companies it is a necessity.

By embracing artificial intelligence (AI) technologies, tax teams can standardize data inputs and outputs across the record-to-report lifecycle to reduce review time, apply global tax rules to detailed transactions to help teams decipher information across various data models and enhance efficiency in tasks like workflow, calculations and report generation. Tax teams can leverage AI for real-time updates and insights into evolving tax laws, helping to ensure they remain informed and compliant.

AI also can play a pivotal role in talent management, automating repetitive tasks and allowing team members to concentrate on more complex, strategic issues. This new reality not only can boost job satisfaction but also can attract new talent eager to work in forward-thinking environments.

Our latest TFO survey, based on feedback from 1,100 tax and 500 finance leaders in 32 jurisdictions and across 18 industries, revealed 86% of these leaders rank data, AI and technology as a top priority. As they prepare for 2026, tax teams should incorporate AI into their plans — from integrating predictive analytics and dashboards into the provision process to tax-sensitizing data at the source and transforming it into a common framework, reducing the need for reconciliations and reformatting.

Be ready to pivot: tax legislation is evolving at an unprecedented pace

For tax teams, 2025 has been a year of rapid and sometimes unpredictable, legislative change. The enactment of the US budget reconciliation bill (PL 119-21, also known as the “One Big Beautiful Bill Act” or OBBBA) on 4 July introduced substantial changes affecting companies inside and outside the United States. These include modifications to the global intangible low-taxed income and foreign-derived intangible income regimes, as well as significant changes to controlled foreign corporation and foreign tax credit rules that impact US companies with foreign operations.

Enactment in nearly 60 jurisdictions of the OECD's Base Erosion and Profit Shifting (BEPS) Pillar Two framework, which introduces a 15% global minimum tax for multinational companies with at least EUR 750 million revenue, means additional compliance regulations and filing requirements for thousands of businesses — including some filing requirements with deadlines before the end of 2025.

According to our latest TFO survey, 81% of respondents say jurisdictional implementation of Pillar Two global minimum taxes is the biggest legislative and regulatory change impacting their business and 85% say they will pay more tax as a result.

Tracking BEPS and other regulatory changes, including notable developments related to a potential “side-by-side" system that would exempt US multinationals from the income inclusion rule and undertaxed profits rule and adjusting compliance strategies accordingly should be a top priority for tax teams as they close out 2025 and look ahead to next year. Establishing a robust compliance framework that incorporates real-time tracking of regulatory developments will be essential for adhering to new regulations and managing the risks associated with non-compliance.

Tax teams should evaluate the anticipated impacts of these developments on financial statements prior to year-end and adapt their processes and controls to gather effectively and timely information and perform necessary calculations.

Accelerate year-end tax accounting work

For many tax teams, the end of the calendar year brings the formidable tasks of closing out financials and preparing for the new year. To achieve greater efficiency and a shorter close cycle, tax teams should analyze unique and discrete events ahead of year-end. This analysis can include completing provision-to-return (PTR) calculations, evaluating differences due to changes in estimates or errors and conducting thorough analyses of significant tax considerations, transfer pricing documentation and internal controls.

By performing comprehensive analyses and taking necessary actions in advance — such as documenting changes in uncertain tax positions and addressing personnel changes to avoid gaps in processes — tax teams can reduce the obligation and risk of the year-end close process.