Tax Management – How Digital Solutions Help Businesses

As nations around the globe pursue revenue and compliance, they increasingly use digital taxes and tools to check vendors and banks to determine what your company owes and whether it’s following the rules. That gives tax leaders much to manage as they pursue goals involving compliance, ever-changing tax regulations, productivity, and a better experience for their team members and other employees.

The change outpaces cumbersome country-by-country tax processes, meaning businesses can benefit from a single platform that applies a global approach but adjusts to local differences. With a unified approach and intelligent solutions, compliance increases and so does readiness for change.

What does tax going digital mean?

As businesses adopt digital solutions to replace paper and the tedious, time-consuming, and error-prone processes they support, governments are going digital with their tax collection and management. The UK, China, Brazil, India, Italy, Japan, and other countries already require tax digitalisation, and the mandates will only increase considering pilots and mandate plans underway in the USA, Australia, and Europe. From digitising and storing paper receipts and invoice PDFs to ensuring their finance systems readily connect with those of taxing authorities, businesses will have to embrace tax automation and go digital.

Benefits of digital tax solutions

An integrated, intelligent travel, expense, and invoice digital solution can digitalise tax management processes and deliver key advantages:

• Technology powered by artificial intelligence (AI) can scan massive amounts of data and find, track, and report on spending in receipts, invoices, and expense reports.
• It enables global compliance because it handles requirements from multiple jurisdictions.
• It empowers ongoing compliance as it readily institutes tax changes.

Together, those core capabilities deliver benefits extending from receipts to audits to making work more enjoyable and productive.

Capturing receipts and invoices

Digital tools allow employees to snap pictures of receipts, which can be read through AI. The information can then be categorised, sent to expense reports, and captured by spend management solutions. Whether on paper, a PDF, or an e-invoice, important details are culled, validated, and available to meet the requirements of applicable countries and locales.

Establishing compliance and audit trails

Solutions apply tax-compliance requirements to each document and its charges. Expenses are created for the spend management solutions, and the charges are shared with integrated company finance systems. Documents and images are archived according to the requirements of varying jurisdictions. With spending visible and documentation linked and accessed, you can easily conduct digital tax audits and prove compliance.

Tracking and reclaiming VAT and similar taxes

Reclaiming VAT and similar taxes—applied in over 160 nations—often proves challenging. As a result, businesses often miss out, to the tune of an estimated $74.9 billion in a recent year.¹ A digital solution lets businesses not only satisfy compliance requirements where they operate but also increase their VAT reclaim. AI and machine learning automatically identify all eligible transactions, using proprietary data sources to validate recoverable VAT eligibility according to global compliance rules. The bottom line increases while risk decreases.

Identifying tax employee benefits

Spotting taxable benefits like mobile phones and internet service on expense reports was always challenging, but the magnitude grew as hybrid and remote work proliferated. Digital tools incorporating AI can find potentially taxable reimbursements in expense reports and elsewhere and then apply requirements for multiple taxing authorities. The result reduces the risk of audits and penalties for both the company and employees.

Making work easier for employees

With intelligent technology and automated processes, tax and finance teams spend less time on formerly manual tasks. The same is true of business travellers and other employees making purchases. The digital tools take care of receipts, simplify expense reports, and reduce the worry about complying with policies and the latest tax rules, including ones governing taxable benefits. And everyone can do what they and the company prefer: focus on more interesting and value-adding work.

Learning more about digital tax compliance

• Read the whitepaper, Be Ready: Four Ways to Navigate the Shifting Tax Landscape, to find out more about how your business can improve digital tax management and be ready for change.
• Get our eBook, Managing Digital Tax with SAP Concur, to explore SAP Concur solutions, extensions, and services that can help improve your tax management.

^{1. The Hidden Potential of VAT Reclaim, SAP Concur, 2021.}