Publication
Digitalization of the Tax and Trade Functions: An Overview of Tax Technology Trends from the Perspective of Business Informatics
Alexander Beuther; Sebastian Stephan; Peter Fettke
In: Jeffrey Owens; Robert Risse. Tax Law and Digitalization: The New Frontier for Government and Business. Principles, Use Cases and Outlook. Chapter 1, Pages 1-37, ISBN 978-94-035-3403-9, Wolters Kluwer, AH Alphen aan den Rijn, Niederlande, 2021.
Abstract
New technologies are changing the way we work and live, and have the potential to help countries achieve the United Nations Sustainable Development Goals. They can also transform the way that tax administrations, taxpayers and their advisers interact, leading to a reduction in the compliance cost for taxpayers and the administrative cost for tax administrations, a level playing field for large and small businesses, and fewer opportunities to engage in aggresive tax practices. The market for tax tech tools is particularly heterogeneous and lacks transparency. In addition to large providers, there are numerous small and medium-sized providers. Many of them are specialized in particular areas, and thus provide dedicated solutions for special tax issues. However, these developments of tax tech tools are driven by the needs of individual tax departments and solve only specific problems. This market segment has been particularly dynamic in recent years: existing tools have been substantially developed, both technologically and functionally; various providers have established a variety of tools; and many new tools and providers have emerged. Two factors are particularly worthy of note: firstly, there has been increasing cooperation between leading enterprise resource planning (ERP) and tax system providers; and secondly, individual industry solutions have been established by implementation partners. These factors are typical indictors of what is a growing and emerging market. This contribution aims to provide a high-level overview of the market as well as the technically supported functions.