Indirect tax transformation: Navigating change, embracing technology

Global indirect tax challenges

Indirect tax professionals in multinational corporations know one thing for certain: change is constant, and the demands on tax teams are growing. Over the past two years, tax professionals have faced persistent challenges—regulatory pressures, technology shifts, and resource constraints—while charting a bold course toward innovation and resilience.

2024 and 2025 survey data from several Thomson Reuters Institute reports for indirect tax professionals provide an interesting perspective on our collective journey through the core challenges and evolving priorities. Here’s what you need to know about where the indirect tax function stands, and what’s ahead.

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The mood shift: 2024 vs 2025

The operational reality: Mounting challenges for global indirect tax teams

The push for transformation: Nimbleness & upskilling

Key trends and critical additions for your tax team’s radar

What does the future hold for indirect tax?

The mood shift: 2024 vs 2025

The landscape for global indirect tax functions has changed noticeably in just one year:

Technology & automation emerged as a top challenge, alongside regulatory compliance, as reported in the Thomson Reuters Institute report Challenges and Changes in Indirect Tax (2024).
By 2025, anticipated spend on tax technology leapt from 65% (2024) to a striking 74%, with the number of departments actively exploring AI/GenAI tools climbing from 28% to 42%, as reported in the Corporate Tax Technology Report (2025).
Notably, while only a small additional percentage of teams had already implemented AI (2% increase), a massive 88% say more AI is on the horizon in their departments within 1–5 years.

What’s driving this? The mounting complexity of regulatory environments and the need for operational efficiency.

The operational reality: Mounting challenges for global indirect tax teams

Tax teams in the UK, U.S., and Canada experienced sharp increases in operational pressures between 2024 and 2025, as reported in Thomson Reuters Institute reports Challenges and Changes in Indirect Tax & Compliance (2024) and Managing Change in Indirect Tax & Compliance (2025):

Process improvement challenges surged from 28% to 40%

Data management challenges climbed from 28% to 34%

Report accuracy and efficiency challenges jumped from 25% to 39%

It should be noted that Germany was added to the Managing Change report, for the first time. As a result, their soaring regulatory compliance data altered the averages for the UK, U.S, and Canada. If we remove Germany’s numbers and compare the results from 2024, the results favor Technology and Automation as the highest concern for the U.S., UK, and Canada.

Technology and automation from 40% to 53%

Resource constraints from 39% to 46%

Nonetheless, Germany’s situation is a ‘canary in the coal mine,’ so to speak, providing the other markets a sounding alarm of what’s to come. Germany’s heightened urgency to adapt to strict tax regulations shorten reporting timelines from quarters to weeks. Even if the other markets aren’t directly impacted yet, the sentiment shifts can be seen in their data.

The push for transformation: Nimbleness & upskilling

With ever-shifting regulations and tech limitations, tax leaders are grappling with the reality that patchwork solutions—like simply layering a new tool on top of old infrastructure—won’t solve long-term issues. Instead, 2025’s corporate tax technology guidance urges teams to:

Develop nimble processes by adopting cloud-based tax engines, automating returns, and leveraging digital workflow tools for faster compliance.
Upskill the team in analytics, automation, and AI to adapt as new regulatory and reporting environments emerge.
Break down data silos with integrated systems that ensure smooth, accurate collaboration across departments.

Key trends and critical additions for your tax team’s radar

To future-proof your tax function, watch these trends and consider enhancing your strategy with these focus areas:

Global VAT/GST regulatory shifts:Stay alert to sweeping changes in digital tax reporting—especially e-invoicing mandates in the EU, Latin America, and APAC.
E-Invoicing & real-time compliance:Authorities are ramping up efforts for digital reporting, adopt e-invoicing and ensure interoperability with diverse compliance regimes.
Talent & skills gap:Invest in upskilling your staff. AI, analytics, and process automation will redefine what success looks like for indirect tax teams.
Data security & privacy:As data flows multiply across borders, prioritize secure data management, privacy compliance, and robust cyber defense strategies.
Case studies:Benchmark your transformation by learning from companies like Jones Lang LaSalle (JLL), Lenovo, Adobe, Cisco, Henry Company, or Informatica that have successfully integrated technology and driven innovation in indirect tax.
Next-wave disruptions:Keep an eye on what’s coming: Digital currencies, environmental levies, and more regulations that will continue to shape global indirect tax challenges before 2030.

What does the future hold for indirect tax?

Indirect tax is entering a new era—one of accelerated technology adoption, relentless regulatory evolution, and increasing strategic influence inside multinationals. Tax teams must not only keep pace but lead.

The verdict from those on the ground: the next five years will be defined by increased AI deployment, far-reaching process improvements, and greater collaboration between departments. Winners will be those who invest smartly, skill up their teams, and treat technology not as a patch-job, but as a platform for transformation.

For more insights and the full country breakdowns, see the 2025 Thomson Reuters Indirect Tax Report.