Ensuring tax governance during business territory expansion | Transalis blog

Ambitions for organisational growth across border territories must consider how to ensure tax governance.

Variance in global tax reporting requirements is a potential roadblock for many businesses expanding into new territories. This is due to the varied governmental reporting platforms and endpoints that require different document formats and processing structures. The complexity of compliance is a significant burden for Tax Managers to ensure tax governance across entire business operations.

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This blog delves into how Tax Managers can alleviate this burden and ensure scalable compliance as the business continues to grow.

The complexity of tax reporting mandates

Compliance is one of the greatest challenges that tax teams are facing today.

New requirements for e-invoicing, Continuous Transaction Controls (CTCs), and other data-intensive reporting mandates are being rolled out globally. Evidently, compliance is becoming increasingly complex. Tax authorities want more accurate and real-time data. As a result, organisations need to adapt to meet these new obligations.

The rapid introduction of new regulations puts undue pressure on this department to understand all the complexities between different jurisdictions. Tax Managers must ensure that the business systems can deliver the requirement consistently across all relevant territories, by the set deadlines.

In the 2023 Tax Risk and Controversy Survey conducted by EY, it found that among the 2,000+ respondents, senior tax leaders anticipate the number and intensity of audits to grow by 79% in the next two years. 56% expect these audits to request more detailed information or involve increasing transparency and disclosure requirements. Despite this, 70% of the same group said their company doesn’t have complete visibility of all their ongoing disputes globally.*

For example, a multinational organisation must keep track of all regulatory changes that impact the business. This includes different data formats, archiving requirements, and deadlines across all operational territories. Therefore, the tax department must implement a solution that provides workflows for each territory and have systems in place to monitor changes in tax law.

Attempting to tackle this solely on an in-house basis would be risky. Manually gathering, consolidating, and validating all the necessary data is extremely time-consuming, and the chances of human error are invariably high. Not to mention the reliance on Tax Managers to be highly responsive when new legislation is introduced, both in existing markets and when entering new market territories.

This is all without considering the costs imposed on the business to comply with these additional administrative requirements.

The cost of tax governance

Whilst compliance with tax regulation is necessary, it introduces an administrative burden as well as additional costs to the business.

The European Parliament explored this issue in their report Overview on the tax compliance costs faced by European enterprises.** In this report, it was found that the higher the level of complexity and uncertainty regarding tax compliance generally increased business costs. As already explained, addressing compliance requirements using existing systems and processes is risky and costly. The internal resources required to deliver compliance expand beyond the tax team. Unless the business moves past manual processes and disparate systems, the need for more data at greater speed will strain the tax department and IT resources to an unsustainable level.

Tax compliance costs faced by private enterprises in the European Single Market are found to be sizable, most commonly ranging between 1% and 2% of turnover.
European Parliament**

Trying to maintain compliance without the proper tools, will lead to other costs outside of resourcing. E.g. mistakes, which can be costly to rectify. Tax authorities impose strict penalties on organisations that do not comply with requirements.

So what is the ideal approach to compliance for organisations expanding into new market territories?

Mitigating the risks for Tax Managers

To avoid the headache of managing compliance internally, organisations should turn towards dedicated compliance solutions.

E-invoicing and tax compliance can both eat into the bottom line and be incredibly time-consuming, but with the right approach, it doesn’t have to be.

Transalis offers a dedicated compliance service. This solution connects your business to the required tax authority and automatically delivers documents in the required format within the required timeframe.

This solution provides organisations with the peace of mind with the following:

  • Providing predictable and forecasted compliance costs

  • Eliminating manual errors to avoid penalties and cash flow issues

  • Supporting expansion opportunities into new cross-border markets

  • Keeping up-to-date with changing regulations

Why not take a look at our case studies, where we have supported organisations with their business expansion and compliance with invoicing and tax reporting requirements. Or if you want to discuss how this would look for your business, you can book a meeting with our dedicated compliance team.


eInvoice Software

Is your business currently expanding into new country territories? Schedule a meeting with our knowledgeable team to discuss your business needs for tax governance and compliance solutions. You can also call us via 0845 123 3746 (UK callers) or +44 1978 369 343 (international callers), or email directly at sales@transalis.com.


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