The latest OECD report on Tax Administration Digitalisation and Digital Transformation Initiatives paints a clear picture: tax is no longer just a regulatory hurdle. It’s becoming a seamless, digitally integrated experience and businesses need to be ready.
The report, drawing on data from over 100 tax administrations (with a focus on 54 OECD members), reveals a world of change happening behind the scenes in tax systems globally. From AI to APIs, governments are accelerating their transformation – not just digitising forms, but fundamentally rethinking how taxation fits into the digital economy.
Key Takeaways: The future is (almost) here
1. Digital identity is the new norm
Nearly all tax administrations now use digital identities (DIs) to verify users securely. These systems are often interoperable, enabling access to other government or even private sector services. For businesses, this marks the end of paper-based bureaucracy and the beginning of real-time, identity-verified tax interactions.
2. APIs and seamless filing
Over 80% of tax administrations have developed APIs to support real-time data exchange and automation. Solutions like Comply and eInvoice which have API submissions to tax offices can drastically reduce compliance burdens and human error while submitting indirect tax returns.
3. AI is already in use
More than 70% of tax administrations are using AI for fraud detection, risk assessment or customer support. While this raises questions about privacy and transparency, the message is clear: intelligent, proactive tax systems are becoming the norm.
4. The Human factor: New skills required
Tax authorities are investing in digital skill development, reshaping their workforces for a tech-driven future. A similar shift is essential in the private sector: digital literacy and tech fluency are fast becoming compliance prerequisites.
5. Governance and strategy are catching up
Nearly 80% of administrations now have formal digital transformation strategies with governance frameworks in place. This underlines how seriously governments are taking this shift – and how sustained their efforts are likely to be.
Our take: Why businesses can’t wait
Digital transformation, especially within indirect tax isn’t just an administrative trend – it’s a signal that the rules of engagement are changing. Governments are integrating tax into the digital fabric of business activity. Soon, tax won’t be something you “do” after the fact – it will be an embedded, automated process triggered by business-as-usual operations.
For businesses, especially SMEs and multinationals operating across borders, this means:
- Integrating via APIs is no longer optional. It’s the most efficient route to compliance and may become mandatory in some jurisdictions.
- Investing in data quality is crucial. Prefilling and automation depend on the accuracy and structure of the data you produce – particularly in e-invoicing, payroll and financial reporting. With data transformation tools you can clean your data through standardising formats, fixing errors and transforming files into clean, usable datasets.
- Skilling up is urgent. Finance, tax and IT teams must understand how digital tax systems work, how to manage data securely and how to adapt to AI-driven decision-making by tax authorities.
- Keeping an eye on governance. With tax rules increasingly becoming machine-readable and applied in real-time, businesses must ensure robust oversight and audit trails.
Final thought: Embrace the shift
This isn’t about reacting to a one-off change – it’s about recognising the structural evolution of tax. The real winners will be those businesses that see this as a chance to modernise their internal processes, reduce risk and build trusted, data-rich relationships with tax authorities.
Tax is becoming digital, intelligent and integrated. It’s time your business was too.
Source: OECD (2025), Tax Administration Digitalisation and Digital Transformation Initiatives, OECD Publishing, Paris, https://doi.org/10.1787/c076d776-en.
Comply – VAT compliance solution
Comply revolutionises indirect tax management for global businesses by automating the end-to-end VAT return preparation and submission across jurisdictions.
Seamlessly integrating with leading ERP systems, Comply drives efficiency, reduces risk and scales with your business. Backed by Fintua’s expert support, it’s the smarter, faster way to stay ahead of ever-evolving tax requirements.
Authors
Lisa Dowling
Specialising in International VAT Compliance solutions, Lisa brings a wealth of knowledge and insight in her dealings with a host of international clients ranging from start-ups through to multinationals. With 21 years VAT experience behind her, Lisa has managed VAT compliance issues and solutions globally for for over 11 years. Fintua have 12,000 + corporate clients in over 109 countries and many of these are members of the Fortune 500.
