Highlights:
Corporate tax faces mounting pressure from complex regulations, digitalization, data volume, and talent shortages.
Many departments rely on outdated, manual, or fragmented systems, hindering efficiency and strategic input.
Transforming tax data management through centralization and automation is crucial for compliance, accuracy, and agility.
The corporate tax landscape is evolving at an unprecedented pace. Navigating intricate regulations, keeping up with technological advancements, and bridging a persistent talent gap are daily realities for direct tax professionals. In this dynamic environment, clinging to outdated methods isn’t just inefficient; it’s a significant risk. As highlighted in a recent Thomson Reuters white paper on tax data management, the need for transformation is urgent. Moving towards more efficient, flexible, and strategic tax operations isn’t just about compliance—it’s about gaining a competitive edge.
This post explores the findings of that white paper, delving into the current state of tax data management, the pressing need for change, the hurdles to overcome, and how embracing modern solutions like Thomson Reuters ONESOURCE can pave the way for a more resilient and strategic tax function.
The evolving challenges in corporate tax data management
The current state of tax data management paints a picture of departments grappling with a mix of old and new. While progress has been made, manual processes and partially automated systems remain common. The 2025 Corporate Tax Technology report by the Thomson Reuters Institute (TRI) found that 60% of respondents estimated only 10% to 50% of their tax department’s work is automated. This gap underscores the untapped potential of technology.
Furthermore, data often remains siloed. The same TRI survey revealed just under half (49%) use dedicated data storage systems like data warehouses or lakes. Less than a third use APIs for system communication. Compounding this, the 2024 State of the Corporate Tax Department (SOCTD) report indicated only 26% had implemented a dedicated tax data management system.
Why the lag? The SOCTD report points towards a reactive, underfunded approach. Key barriers identified include:
Time constraints: Nearly two-thirds (67%) stated a lack of time to research and plan new technology adoption as the primary obstacle.
This leads to a fragmented technology landscape where tools are adopted piecemeal, hindering overall effectiveness and the ability to derive strategic insights.
Simultaneously, demands on tax teams are intensifying. Growing business complexity, increased scrutiny from digitally-advancing tax authorities, evolving global regulations like Pillar 2 (bringing massive data volumes and tighter deadlines), and difficulties recruiting and retaining skilled tax professionals create immense pressure. Managing large volumes of often unstructured data with limited resources and time makes strategic analysis nearly impossible, limiting the tax department’s role.
Overcoming hurdles: Moving beyond ‘good enough’ data management
Many tax departments operate with tools considered “good enough,” often relying heavily on generic spreadsheets. While functional for basic tasks, these tools lack the sophistication needed for today’s complex tax environment. This reliance fosters inefficiencies:
Data fragmentation: Information remains locked in separate files or systems.
Lack of transparency: Processes become opaque and difficult to audit.
Manual effort: Significant time is spent on data entry, manipulation, and reconciliation.
Increased error risk: Manual processes are inherently prone to mistakes.
These limitations directly impact compliance accuracy and consume valuable resources that could be allocated to strategic analysis. Overcoming this requires challenging the status quo. Resistance to adopting new, integrated technologies often stems from concerns about cost, implementation complexity, and workflow disruption. However, the cost of inaction—in terms of inefficiency, risk, and missed strategic opportunities—is often far greater.
The transformation journey starts with data itself. The first crucial step is tackling data silos by implementing a centralized tax data management approach. This ensures data consistency and accuracy, forming the bedrock for reliable compliance and reporting. A centralized system unlocks the power of advanced analytics, revealing insights previously buried in disparate sources. Automating data collection, processing, and reporting further frees up professionals to focus on higher-value strategic initiatives, shifting the department from a reactive compliance function to a proactive business partner. Robust data governance and security protocols are paramount throughout this process, alongside equipping the team with the necessary skills to leverage these new data capabilities effectively.
Unlocking value: The benefits of effective, modern tax data management
Transforming tax data management yields significant, tangible benefits that extend far beyond basic compliance. Modernizing processes and adopting integrated technology creates a more resilient and strategic tax function. Key advantages include:
Improved accuracy and compliance: Centralized, standardized data and automated validation reduce errors, minimize penalty risks, and ensure smoother, more reliable compliance reporting.
Increased operational efficiency: Automating repetitive, manual tasks frees up significant time for tax professionals, allowing them to shift focus from data wrangling to strategic analysis, planning, and risk management. Studies, like the 2025 Corporate Tax Technology report, suggest automation can address the 40-70% of employee time typically spent on manual data activities.
Enhanced decision-making: Real-time access to accurate, comprehensive data provides greater transparency and control, enabling more informed, data-driven strategic decisions regarding tax positions, planning, and risk mitigation.
Greater agility and scalability: Flexible data and process technology create an adaptable foundation capable of handling evolving business needs, regulatory changes (like Pillar 2), and future unknown tax challenges.
Strategic partnership: By providing timely, actionable insights derived from reliable data, the tax department elevates its role from a cost center to a valuable strategic partner contributing to broader organizational goals.
Talent optimization: Reducing low-value, repetitive work makes the tax function more attractive and provides opportunities for talent development in higher-level analytical and strategic roles, helping to mitigate talent shortages.
Navigating the future with Thomson Reuters ONESOURCE
Recognizing the challenges and the potential benefits of transformation is the first step. The next step is implementing the right technology. Thomson Reuters ONESOURCE is designed specifically to address the complexities faced by modern corporate tax departments, enabling them to build resiliency with trusted tax data and process management.
ONESOURCE empowers tax professionals to take control by providing solutions that:
Centralize and standardize data: Integrates data from various sources (ERPs, transactional systems, etc.) into a central hub (like ONESOURCE Data Hub). This creates a single source of truth, breaking down silos and ensuring consistency for compliance, reporting, re-use, and audits. ONESOURCE DataFlow facilitates consistent, process-driven data collection.
Automate workflows: Streamlines repetitive processes for data collection, transformation, cleansing, and sharing. ONESOURCE Workflow Manager operationalizes complex processes with control, tracking progress and managing tasks. The unique partnership with Alteryx further enhances automation, allowing for sophisticated data preparation and blending workflows without requiring extensive IT resources, reducing manual effort and error risk significantly.
Improve collaboration and visibility: Provides a platform for seamless communication and task management across teams involved in the tax lifecycle. This ensures alignment and allows for proactive management of deadlines and resources.
Strengthen audit defense: Maintains a clear, accessible audit trail and comprehensive documentation, providing the necessary evidence to confidently support tax positions during audits.
Enable strategic analysis: By handling the heavy lifting of data management and preparation (leveraging tools like ONESOURCE Data Query and the Alteryx connector), ONESOURCE frees up tax professionals to utilize analytics tools (including connections to PowerBI, Tableau via APIs) for deeper insights and informed strategic planning.
In conclusion, the pressures on corporate tax departments demand a fundamental shift away from outdated practices. The time to embrace efficient, integrated tax technology is now.
By using solutions like Thomson Reuters ONESOURCE, organizations can change how they manage tax data. This will improve compliance and efficiency, while also allowing their tax function to be more strategic and help them deal with the challenges of today and tomorrow.
