Key insights:

• • • Real-time tax compliance has restructured the tax function — Dozens of nations now require structured invoice data in real time, with the EU mandating cross-border digital reporting by 2030. The traditional file-and-wait audit cycle is gone now, replaced by clearance regimes that can freeze multi-million-dollar invoices for nonconforming data.

    • Regulators have pulled ahead of the businesses they oversee — Tax authorities in mature CTC jurisdictions now arrive at audits with structured transaction data already processed by their own analytics. Government turnaround times that took months now take weeks, forcing multinational tax leaders to compress multi-year roadmaps into 12- and 18-month cycles to keep up.

    • The lessons travel beyond tax — There are two ways to lose this race: Outrun your own controls or surrender entirely. Both showed up in Las Vegas, and both will show up in every other regulated profession over the next decade.

LAS VEGAS — TheĚý sold out. A guest list that included tax directors from Amazon, Walmart, and Procter & Gamble, OpenAI’s tax department, the Big Four, ¶¶ŇőłÉÄę and every other major tax software provider in the market spent three days at the Aria with pool deck, casino floor, and restaurants worth lingering over all a few steps away.

The room had every reason to spend its evenings somewhere else other than a sunless conference room talking about tax. Yet almost no one did. They were too busy grappling with an arms race the corporate audit side had begun to suspect it was losing.

And it’s one they cannot afford to lose.

End of the traditional model

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade. By April, more than 60 jurisdictions have moved or are moving to continuous transaction controls. Italy and Hungary were early; Poland, France, Belgium, Brazil, Saudi Arabia, India, and Singapore are now operational or imminent, and countries like Spain, Germany, the United Kingdom and the United Arab Emirates are on the way. The European Union has locked onto a 2030 deadline for cross-border real-time digital reporting and a 2035 backstop for harmonizing what’s left.

The traditional model — issue an invoice, file a return weeks later, audit when the auditor gets around to it — no longer exists in those jurisdictions. Tax authorities now see the transaction as it happens, validates it in structured form, and pre-fills the return on the taxpayer’s behalf.

What this new process has done to the tax function is fundamentally alter its structure in a way leaves practitioners reeling. The job used to be a craft of Excel, judgment, and institutional memory. Now, at the high end, it has become as much a data science problem as an accounting one.

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade.

Attendees at TEI’s 2026 Tax Technology Seminar polled themselves on tooling, and the answers came back as a list of data pipelines that dozens of attendees seemed to favor: Alteryx, Power Platform, Snowflake, Databricks, Microsoft Fabric, & Palantir Foundry. These platforms are running agentic AI systems against historical filings, deploying validation agents to critique their own outputs, and using AI-driven image-to-text solutions to pull structured data out of state tax notices that never arrive in the same format twice. They are data integration pipelines in 15 minutes that would have sat in an IT queue for two months before being answered.

They have little choice as the stakes are far higher and the challenges far more demanding than they used to be. In a clearance regime, an invoice has no legal force until the tax authority returns its identifier. Did you submit the wrong VAT ID, malformed schema, or mismatched master data? Congratulations! Your invoice is rejected. That means the truck doesn’t move, the buyer doesn’t pay an invoice that may be in the millions of dollars and then the penalties stack on top. Italy, for instance, charges a fee of 70% of the disputed VAT.

And then there are the audits.

Outgunned

The audit isn’t an occasional event anymore. In government jurisdictions with mature continuous-transaction-control tax regimes, it is a conversation that started weeks before the auditor walked in, on data their analytics had already processed.

A speaker on a seminar panel led by Deloitte and ¶¶ŇőłÉÄę described the dynamic plainly: Tax authorities in those jurisdictions have arrived at audits already knowing more about the transactions than the companies and their in-house audit teams sitting across the table. Not because anyone is hiding anything, but because the data arrived at the tax authority in structured form, in real time, and the authority had run its analytics on it before the meeting was even on the calendar. One panelist said this represents “a shift from us preparing returns to us answering notices on the data that’s been shared.”

What the room kept circling around, however, was that regulators have not just kept pace with their counterparties, they’ve now pulled ahead. Singapore, one panelist noted, is doing more with AI than even major companies. Indeed, government turnaround times that used to take months are now closing in weeks, which is forcing multinational tax leaders to compress their multi-year roadmaps into 12- and 18-month cycles — not because they want to but because their counterparties already had.

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI’s 2026 Tax Technology Seminar as cautionary tales.

This asymmetry is structural, and that is what makes it an arms race rather than a transition. There is no version of this dynamic in which the company being audited wins by being more careful, more thorough, or more well-prepared at the end of the quarter. The advantage now accrues to the side with the fastest and cleanest pipelines, that runs the smartest AI, and that understands the way these increasingly complex systems interact. Increasingly, that winning side is the government. And, more alarming, this isn’t just a problem for this particular industry — tax just happened to get here first. However, it’s coming for everyone.

Two ways to lose

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI’s 2026 Tax Technology Seminar as cautionary tales. The first is to outrun your own controls. AI coding tools that let a tax analyst build a working data integration pipeline in 15 minutes are genuinely valuable; they also let that same analyst deploy something nobody else has reviewed, documented, or knows how to maintain. An OpenAI panelist conceded the point when an audience member asked about the security implications of vibe coding — clearly, a new capability is also a new problem.

The second way to lose is harder to talk about. One panelist described, to attendees’ general dismay, hearing of companies that have given up on compliance entirely — instead, they pad their numbers with a safety margin and treat the eventual audit as the cheaper of the two costs. The panel recoiled — one member responded with a flat “Do not do this.” However, the anecdote landed because it isn’t theoretical. When the gap between what regulators can see and what your team can produce becomes wide enough, surrender starts to look rational.

Playing to win

Of course, the attendees at TEI’s 2026 Tax Technology Seminar were not surrendering. If they were, they’d have been at the pool deep into their third cocktail. Or they’d have been on the casino floor or were about to catch an afternoon show. Instead, day after day, the tables filled, the exhibit hall ran hot, and the room was buying, listening, and building.

The game has changed and the stakes have risen — and the room is dead set on playing to win.

You can find more ofĚýour coverage of Tax Executives Institute events here

• • • The reactive phase is partly a mindset problem — More than half of tax departments remain stuck in reactive, compliance-focused operations, not only because of frozen budgets, but because of cost-center thinking that shapes cost-center behavior.

    • The value is there, but the measurement isn’t — Two-thirds of tax professionals say their department’s technology investment has already enabled more strategic work; yet 22% say they track no performance metrics at all, making that value invisible to the people who control the budget.

    • The rebrand starts internally — With AI integration timelines compressing to between 1 and 2 years, tax departments that shift their posture now by measuring wins, designating leadership, and building the business case will be better positioned to lead — and those that don’t will fall further behind, faster.

Apart from the sales department, most other departments within a business are simply viewed as a cost center, and the tax department is no exception. However, like so much of that thinking, this view isn’t quite accurate because it is the tax department that can uncover the most savings for the business.

You need not look further than recent data that shows while 67% of tax professionals say their department’s technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department’s value to the C-Suite.

Given this, it’s somewhat unsurprising that this cost-center view persists. Worse yet, is often internalized by in-house tax teams themselves. It is one thing to be viewed and treated as a cost center but to act like one is a different matter.

So, what if the bigger problem isn’t how the rest of the business views the tax department but instead how the department views itself?

The , from the Thomson Reuters Institute and Tax Executives Institute, reveals a profession that knows it is capable of far more than it is currently delivering. And yet the same patterns repeat: Budgets stay flat, technology adoption stays slow, and a majority of departments remain stuck in a reactive phase in regard to their technological development that has “remained stubbornly consistent over the past few years,” according to the report.

That’s not just an organizational failure; rather, that’s a mindset problem — and it starts from within the tax department.

The choices we keep making

The report outlines a Technology Maturity Curve that maps a progression in tech development from chaotic through reactive, proactive, optimized, and predictive stages.

This year, 64% of respondents placed their tax department at the chaotic or reactive end of the spectrum — up from 57% last year. The reactive phase is the operational definition of a cost center: Heads-down, output-focused, and disconnected from the broader business.

The report reveals something even more important. In those cases in which the budget isn’t the primary constraint, behavior doesn’t change. Almost one-third of respondents (32%) said their strategy for addressing capacity constraints is process optimization — without new technology or additional hiring. Not because they can’t pursue more, but because that’s the default mode.

One respondent put it plainly: “…Our company as a whole is making significant changes, but the tax department is typically an afterthought in those decisions.”

This raises a question that’s worth asking: Who taught the company to treat tax as an afterthought?

There’s evidence showing that tax departments are more

The data to challenge the cost-center identity isn’t missing; rather, it’s just not being captured or communicated to the C-Suite.

Two-thirds of respondents (67%) said their tax department’s technology investment over the past three years has already enabled a shift toward more strategic, proactive work, such as data analytics, forecasting, risk assessment, and decision-making support. Among larger departments, nearly half (48%) are now spending more time on these higher-value activities. This clearly shows that companies that have invested in tax automation are reporting real results, such as improved accuracy, reduced errors, lower costs, and streamlined workflows.

And yet, 22% of tax departments track no technology performance metrics at all, according to the report — not time savings, not error reduction, not ROI. Nothing.

While 67% of tax professionals say their department’s technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department’s value to the C-Suite.

That is cost-center thinking in action — the belief that it’s the job of the tax department to do the work, but not to prove its value. However, what isn’t measured can’t be communicated — and what can’t be communicated can’t change the perception, either internally or externally.

The rebrand starts with how departments see themselves

The most important audience for the tax department’s rebrand isn’t the C-Suite. It’s the department itself.

That means tracking wins and building a formal business case for investment — grounded in hard ROI and cost savings, which the report identifies as the metrics that are most important to Finance and IT, the two functions that frequently share control of the tax technology budget.

It also means getting serious about leadership. The portion of tax departments with a designated person leading tax technology strategy jumped to 88%, from 51%, in a single year. However, a title only goes so far; and the report is clear — that role only works when backed by a team that believes it belongs at the decision-making table.

Finally, this rebranding means treating AI as an opportunity, not a threat. The majority of tax professionals have compressed their expectations for AI integration to 1–2 years, from 3–5 years, with 7% saying AI is already central to their workflow. Those departments still locked in cost-center mode are the least prepared for that shift — because cost centers don’t invest ahead of the curve.

The narrative changes when the mindset changes

No one is going to rebrand the tax department on its own, it has to come from within. Further, it has to be built through deliberate measurement, consistent communication, and a shift in how tax professionals think about our own work.

Your department is not a cost center. The work proves it, and the data backs it up. Now, you should act like you believe it.

You can download a fully copy of the , from the Thomson Reuters Institute and Tax Executives Institute, here

Key takeaways:

• • • Your post-OBBBA forecasts should look different — If the tax department doesn’t own the OBBBA model, someone else will own the OBBBA story.

• • • Rely on your department’s inner strengths — It’s governance and analysis — not tools — that get you into the strategy room.

    • Factor in the conflict in the Middle East — The Iran war risk belongs in your tax model, not just in your CFO’s macro deck.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted large business tax cuts, most notably by providing permanent full expensing of many forms of investment. Under the previous major corporate tax legislation, 2017’s Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled for gradual phase-out following 2023. The OBBBA restored that expensing 100% retroactively for assets acquired from mid-January 2025 onwards.

The after-tax cost of new machinery, fleets, and equipment has effectively fallen by around 21%, designed to encourage immediate capital outlays by allowing businesses to write off these expenses in the year they are incurred rather than amortizing them over five years.

For corporate tax departments, that’s not a disclosure footnote — that’s your capital plan.

Capital-intensive corporations will see tax burdens reduced through permanent rate extensions, depreciation adjustments, and expansion of the state and local tax (SALT) deduction cap — but only if your models are built to capture the timing and location of investment, the mix of debt compared to equity, and where your organization books its next dollar of income.

Not surprisingly, most corporate tax departments aren’t there yet. They’re still recalculating last year, plus a few adjustments. That’s glorified compliance, not modeling.

A standout tax department doesn’t ask, What’s the OBBBA impact? Rather, it asks, Which version of OBBBA do we choose for this business? — and it has the models to back it up.

From spreadsheet heroics to controlled modeling

For many organizations, tax modeling still means creating a massive spreadsheet that only one director truly understands. The spreadsheet gets pulled out for budget season, rebuilt under pressure, and quietly retired until next year. That’s a single point of failure, not a process.

And after OBBBA, continuing that practice is dangerous. One wrong assumption on expensing or interest limitation can move cash tax by millions of dollars and blindside the Finance Department.

Here’s what disciplined modeling looks like in practice:

• • • Create a unified model — Build one integrated model that the whole team can use or accept that your department is choosing to fly blind.
    • Use the same assumptions — Standardize the levers that matter most (such as capex timing, financing mix, jurisdiction, and incentives) and make sure every scenario runs off the same assumptions.
    • Conduct modeling reviews — Treat major OBBBA-driven decisions (such as large capex, funding shifts, supply-chain redesign) as tax deals that must go through a modeling review before they’re greenlit.
    • Document your assumptions explicitly — Under permanent full expensing, the difference between a well-supported assumption and a poorly documented one isn’t just an audit risk, rather it’s a credibility problem with your CFO.

It’s also important to remember that in a post-OBBBA world, this level of disciplined modeling is not technology transformation — it’s basic survival.

Governance: Where leaders quietly win or loudly fail

The differentiator isn’t which corporate tax department has the fanciest tool — it’s which one has the cleanest governance. And the data is unambiguous: More than half (55%) of tax departments are still in the reactive phase of their technological development, stuck with five capex models circulating with five discount rates and the tax team arriving late to the planning meeting.

Those tax departments that are breaking out of that pattern share one trait: They put someone formally in charge. In the Thomson Reuters Institute’s recent 2026 Corporate Tax Department Technology Report, a large portion (88%) of survey respondents said their company had appointed a person to lead the tax department’s technology strategy. That number jumped a whopping 37 percentage points, from 51%, from the previous year’s survey. That single structural move separates those departments with a governance model from those that simply hold a governance conversation every budget cycle and forget about it.

Clearly, this type of ownership drives results. Two-thirds of those surveyed agreed that their company’s investment in technology has enabled a shift from routine, reactive work to more strategic, proactive, higher-value work.

Under OBBBA, the kind of governance isn’t housekeeping. It’s how you get invited into strategy discussions instead of having to clean up after things go awry.

Why your OBBBA win may not feel like a win

On paper, the tax changes embedded in the OBBBA look generous. In practice, your effective tax benefit is colliding with something you don’t control.

When the war on Iran began, all shipping through the Strait of Hormuz was effectively halted, removing roughly one-fifth of the world’s oil and gas supply from the market. Fuel prices throughout the world spiked and are likely to remain elevated as long as conflict persists.

With oil prices hovering around $100 a barrel, there are will wipe out the benefits of higher tax refunds this year for most Americans. If those benefits, arising from Trump’s 2025 tax cuts, are erased for the average American, only the top 30% of taxpayers will still seeing a net gain.

For corporate planning purposes, the parallel dynamic is real: The topline OBBBA benefit is being eroded by higher fuel, freight, and financing costs across the business and its supply chain.

Inflationary pressures are being driven by higher energy prices tied to the Iran war, and the conflict’s impact on a wide range of goods and services is likely to last for months — with experts saying even a ceasefire is unlikely to immediately ease global energy shortages.

A serious corporate tax department doesn’t handwave these concerns away. It takes three actions:

1. 1. 1. Run a war-extended scenario — The scenario should show exactly how sustained higher energy costs and borrowing rates change the payoff from accelerated expensing and leverage — with specific numbers, not just directional commentary.
      2. Share your forecasts internally — Put your monthly or quarterly cash-tax forecasts on the table for Finance to see, so that it can manage liquidity rather than hope the annual plan holds.
      3. Force the hard conversation — Ask the tough question: At today’s rates and fuel costs, the after-tax return on this project is X. Are we still in? That question should come from the tax team now, not from the finance team six months later.

Clearly, the daily fluctuations in oil prices matter less than monthly and quarterly averages — and volatility will likely remain elevated given the absence of a clear timeline for the end of the war. That’s exactly the kind of sustained uncertainty that belongs front and center in your scenario set, not in a footnote.

The bottom line

The OBBBA gives corporate tax departments a genuine opportunity to move from being simply a compliance function to becoming more of a strategic advisor. Permanent full expensing, richer cost recovery, and more flexible interest rules can create real levers to add value, but only for those organizations that model them rigorously, govern them cleanly, and stress-test them against the macro environment their business actually faces today.

Indeed, the Iran war is a live test of that readiness. The corporate tax departments that show up with modeled scenarios, cash-tax forecasts, and a clear point of view on after-tax returns will earn a seat at the strategy table. The ones that show up with caveats will be asked to leave it.

You can download a full copy of the Thomson Reuters Institute’s recent 2026 Corporate Tax Department Technology Report here

Key takeaways:

• • • Country-by-country reporting will only increase in complexity — Australia’s enhanced Country-by-country reporting (CbCR) requirements — reconciling taxes accrued against taxes credited — are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams — The EU’s public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public — inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes — If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC — Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD’s basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations’ cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically — rather than scrambling jurisdiction by jurisdiction — would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU’s public CbCR rules put organizations’ jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations’ employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision — it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business — in this case with the communications team — to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision — it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down — indeed, it is intensifying — and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind — If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy — If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally — Your company’s tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG — and in today’s world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that — and that trajectory is not reversing any time soon.

You can download a full copy of the Thomson Reuters Institute’s

Key takeaways:

• • • Only IEEPA‑based tariffs are up for refund — Refunds will flow electronically to importers of record through ACE, the government’s digital import/export system, but only once CBP’s process is finalized.

    • Liquidation and protest timelines are now critical — An organization’s tax concepts that directly influence which entries are eligible and how long companies have to protect claims.

    • Tax functions must quickly coordinate with other corporate functions — In-house tax teams need to coordinate with their organization’s trade, procurement, and accounting functions to gather data, assert entitlement, and get the financial reporting right on any tariff refunds.

WASHINGTON, DC — When the United States Supreme Court issued its much-anticipated ruling on President Donald J. Trump’s authority to impose mass tariffs under the International Emergency Economic Powers Act (IEEPA) in February it set the stage for what it to come.

The Court ruled the president did not have authority under IEEPA to impose the tariffs that generated an estimated $163 billion of revenue in 2025. In response, the Court of International Trade (CIT) issued a ruling in requiring the U.S. Customs and Border Protection (CBP) to issue refunds on IEEPA duties for entries that have not gone final. That order, however, is currently suspended while CBP designs the refund process and the government considers an appeal.

AtĚýthe recent , tax experts discussed what this ruling means for corporate tax departments, outline what is and isn’t a consideration for refunds and the steps necessary to apply for refunds.

As panelists explained, the key issue for tax departments is that only IEEPA tariffs are in scope for refund — many other tariffs remain firmly in place. For example, on steel, aluminum, and copper; Section 301 tariffs on certain Chinese-origin goods; and new of 10% to 15% on most imports still apply and will continue to shape effective duty rates and supply chain costs.

So, which entities can actually get their money back?

Legally, CBP will send refunds only to the importer of record, and only electronically through the government’s digital import/export system, known as the Automated Commercial Environment (ACE) system. That means every potential claimant needs an with current bank information on file. And creating an account or updating it can be a lengthy process, especially inside a large organization.

If a business was not the importer of record but had tariffs contractually passed through to it — for example, by explicit tariff clauses, amended purchase orders, or separate line items on invoices — they may still have a commercial basis to recover their share from the importer. In practice, that means corporate tax teams should sit down with both the organization’s procurement experts and its largest suppliers to identify tariff‑sharing arrangements and understand what actions those importers are planning to take.

Why liquidation suddenly matters to tax leaders

As said, the Atmus ruling is limited to entries that are not final, which hinges on the . CBP typically has one year to review an entry and liquidate it (often around 314 days for formal entries) with some informal entries liquidating much sooner.

Once an entry liquidates, the 180‑day protest clock starts. Within that window, the importer of record can challenge CBP’s decision, and those protested entries may remain in play for IEEPA refunds. There is also a 90‑day window in which CBP can reliquidate on its own initiative, raising questions about whether final should be read as 90 days or 180 days — clearly, an issue that will matter a lot if your company is near those deadlines.

Data, controversy risk & financial reporting

The role of in-house tax departments in the process of getting refunds requires, for starters, giving departments access to entry‑level data showing which imports bore IEEPA tariffs between February 1, 2025, and February 28, 2026. If a business does not already have robust trade reporting, the first step is to confirm whether the business has made payments to CBP; and, if so, to work with the company’s supply chain or trade compliance teams to access ACE and run detailed entry reports for that period.

Summary entries and heavily aggregated data will be a challenge because CBP has indicated that refund claims will require a declaration in the ACE system that lists specific entries and associated IEEPA duties. Expect controversy pressure: As claims scale up, CBP resources and the courts could see backlogs. If that becomes the case, tax teams should be prepared for protests, documentation requests, and potential litigation over entitlement and timing.

On the financial reporting side, whether and when to recognize a refund depends on the strength of the legal claim and the status of the proceedings. If tariffs were listed as expenses as they were incurred, successful refunds may give rise to income recognition. In cases in which tariffs were capitalized into fixed assets, however, the accounting analysis becomes more nuanced and may implicate asset basis, depreciation, and potentially transfer pricing positions.

Coordination between an organization’s financial reporting, tax accounting, and transfer pricing specialists is critical in order that customs values, income tax treatment, and any refund‑related credits remain consistent.

Action items for corporate tax departments

Corporate tax teams do not need to become customs experts overnight, but they do need to lead a coordinated response. Practically, that means they should:

• • • confirm whether their company was an importer of record and, if so, ensure ACE access and banking information are in place now, not after CBP turns the refund system on.
    • map which entries included IEEPA tariffs, identify which are non‑liquidated or still within the 180‑day protest window, and file protests where appropriate to protect the company’s rights.
    • inventory all tariff‑sharing arrangements with suppliers, assess contractual entitlement to pass‑through refunds, and align with procurement and legal teams on a consistent recovery approach.
    • work with accounting to determine the financial statement treatment of potential refunds, including whether and when to recognize contingent assets or income and any knock‑on effects for transfer pricing and valuation.

If tax departments wait for complete certainty from the courts before acting, many entries may go final and fall out of scope. The opportunity for tariff refunds will favor companies that are data‑ready, cross‑functionally aligned, and willing to move under time pressure.

You can find out more about the changing tariff situation here

• • • Changing the balance of taxes — Budget‑driven tax swaps and incentive reforms are changing the balance between income, property, and sales taxes, forcing large companies to revisit their multistate footprint.

    • How revenue is sourced is changing, too — Rapidly evolving digital and AI‑related taxes are creating new nexus, sourcing, and base‑definition issues for businesses that rely on revenue from digital advertising, social platforms, data monetization, and automated tools.

    • Planning amid continued uncertainty — New federal tax regulations, tariff‑related uncertainty, and even the elimination of the penny are all amplifying state‑by‑state complexity for in‑house tax departments.

WASHINGTON, DC — Tax industry experts who gathered at to provide updates on the current landscape of state and local tax (SALT) policy and offer insight that corporate tax departments should consider found, not surprisingly, that they had a lot to talk about in the current economic environment.

Mapping the new SALT frontier

For starters, this year’s SALT agenda is not just an abstract policy story for large, multistate businesses, rather, it’s a direct driver of cash taxes, effective tax rate (ETR) volatility, and audit exposure. Indeed, several state legislatures are advancing new taxes on digital advertising and data, revisiting incentives and data center exemptions, and using conformity to federal law — especially the tax provisions in the One Big Beautiful Bill Act (OBBBA) — as a policy lever, all against the backdrop of slowing revenues and contentious elections.

“Tax swaps” and incentives — States that are facing budget pressure are, unsurprisingly, looking at tax swaps to reduce income or property taxes while broadening the sales & use tax base and trimming exemptions. For example, on March 3, the state of Florida — which already doesn’t have a state income tax — passed legislation that in the state.

Moreover, with the rapid expansion of AI come the extensive need for data centers. Several states are reassessing data center exemptions and credits, either tightening qualification standards, requiring centers to supply more of their own power, or repealing incentives outright. A decision in Virginia to , for example, is viewed as a potential template for other states, particularly in those areas in which energy and environmental concerns are priorities. At the same time, proposals targeting include expanded corporate tax disclosures, CEO compensation surcharges, and enhanced reporting on apportionment and group filing methods.

What companies should consider — Large companies operating over multiple states should consider making an inventory of their credits and incentives by jurisdiction, including looking at sunset dates and political risk indicators.

Companies should also build forward‑looking models that show how any sales tax base expansion would interact with their supply chain and their procurement of digital and professional services.

New exposure for tech, marketing & data

Bipartisan legislators in several states are continuing to expand on digital economies as a revenue and policy target. For example, Maryland continues to lead with its digital advertising tax; while Washington state’s expansion of its sales tax to include certain digital and IT services and Chicago’s social media taxes illustrate the variety of approaches that state and local jurisdictions are exploring to expand their tax base and raise revenue.

Data and “digital resource” taxes — Proposals in states such as New York would tax companies that derive income from resident data, treating data as a natural resource. While no state has fully implemented a comprehensive data tax, however, large platforms and data‑driven enterprises are monitoring these bills closely.

AI‑related SALT rules — Many states still classify AI solutions under existing Software as a Service (SaaS) or data‑processing categories, but some — including New York — are exploring surcharges tied to AI‑driven workforce reductions. And at least two states are explicitly taxing AI, similarly to the way software is taxed.

For corporate tax leaders, some practical next steps should include mapping those areas in which your group has digital ad spending, user bases, data monetization, or AI deployments. Then, overlaying that with current and pending digital tax proposals. In parallel, it is increasingly critical for the tax team to partner with IT and marketing teams to understand how contracts, invoicing structures, and platform design will affect nexus, tax base definition, and sourcing.

Federal shifts magnify multistate complexity

The OBBBA made permanent several of , while expanding SALT relief on the individual side and creating new interactions for multinational groups. Because most states start from federal taxable income — either on a rolling, static, or selective conformity basis — OBBBA changes reverberate across state corporate income tax bases, especially in those states that have decoupled themselves from interest limits, R&D expensing, or new production‑related incentives.

Corporate tax departments must now juggle different conformity dates and selective decoupling rules across rolling and static states, including jurisdictions that automatically decouple when a federal change exceeds a revenue impact threshold. This requires more granular state‑by‑state modeling of OBBBA impacts on apportionable income, deferred tax balances, and cash tax forecasts. It also heightens the risk that political disputes — such as — produce mid‑cycle changes that complicate provision and compliance processes.

Penny elimination — With federal , states now are moving toward symmetrical rounding for cash transactions, rounding the final tax‑inclusive total to the nearest five cents while attempting not to alter the underlying tax computation. For retailers and consumer‑facing enterprises, this shifts the focus to point of sale (POS) configuration, consumer‑protection exposure, and class‑action risk if rounding is implemented incorrectly.

Tariffs and refunds — The U.S. Supreme Court’s Learning Resources, Inc. v. Trump decision under the International Emergency Economic Powers Act in February leaves open how more than $100 billion in and what that means for prior sales & use tax treatment. Streamlined guidance generally treats tariffs embedded in product prices as part of the taxable sales price but excludes tariffs paid directly by a consumer‑importer from the tax base, raising complex questions if tariff refunds reduce costs or sales prices retroactively.

For indirect tax department teams, the confluency of the 2026 SALT changes — including the impacts around everything from data center credits to the recent Supreme Court tariff decision — the need to rely on internal partners across the business has never been stronger. Combining that with a greater reliance on technologies, including dedicated research tools to stay abreast of state-by-state tax changes, may be the best way for corporate tax teams to keep up with compliance requirements and avoid penalties.

You can download a full copy of here

Key takeaways:

• • • The supply hit is real, not just priced-in fear — Tanker insurance has collapsed, infrastructure is damaged, and volumes are physically offline. Some of this isn’t coming back quickly.

    • Tax policy is moving in five directions at once — Energy security incentives, BEPS 2.0 rollout, windfall tax rumblings — governments are improvising, and your effective tax rate is caught in the middle.

    • Your Evidence to Recommendations (EtR) guidance is probably already stale — If you haven’t stress-tested your EtR guidance against $100-plus per barrel oil and a multi-quarter disruption, you’re behind.

Let’s be direct: This isn’t a risky premium situation. When military strikes take out Middle Eastern infrastructure in the Persian Gulf and tanker insurers pull out of a corridor carrying 15% to 20% of global crude and liquefied natural gas (LNG), supply goes offline. That’s what’s happened.

At the time of writing, the price of oil continues to fluctuate. The recent release of the , which forecasts and analyze the global oil market, shows that more global markets are starting to say the word recession. And whether or not a recession actually materializes, the energy price environment has shifted in ways that will take multiple quarters, and maybe years, to unwind. For corporate tax departments, the question isn’t whether this changes their planning, it’s whether they’ve caught up yet.

Which scenario-modeling is most worth it?

Most ominously, nobody knows how this all ends, and that’s exactly why your tax team may need more than one base case.

The optimistic read is a short, sharp shock — prices spike, some flows resume, upstream books a windfall quarter, and consuming-country governments start muttering about excess profits taxes. Messy, but manageable.

The harder scenario is prolonged disruption: Hormuz remains constrained for months, along with repeated infrastructure hits with resulting rerouting that permanently shifts where profits land and which entities suddenly have a taxable presence for which they didn’t plan. Not surprisingly, transfer pricing and permanentĚýestablishmentĚý(PE) exposure get complicated fast.

Add to the mix, by the Organisation for Economic Co-operation and Development (OECD) that multinational corporate tax departments are still required to adhere to and now plan for how it may interact and intersect with the other two scenarios.

The policy environment is a mess, but in a very specific way

Here’s what makes this cycle different from 2008 or 2014: Governments are pulling in opposite directions simultaneously. The United States has pivoted hard toward energy dominance — domestic fossils, nuclear, extraction incentives. Meanwhile, BEPS 2.0 is still rolling out unevenly across jurisdictions, which means your organization’s effective tax rate in any given country depends heavily on where it sits in the implementation timeline.

Throw in — which historically shows up about six months after prices stay high and voters get angry — and you have an environment in which the gap between your statutory tax rate and your actual sustainable rate could widen fast if you’re not actively managing it.

5 actions tax team leaders can take now

Of course, none of these are new concepts; but in a fast-moving situation, the basics that get done quickly will beat the sophisticated that gets done late.

First, rebuild your EtR guidance around at least three commodity paths. Not as a theoretical exercise — as something your CFO can actually present to the board with a straight face.

Second, map out which legal entities are genuinely exposed to Hormuz-dependent flow volumes. Companies’ operations and trading teams often know this; but the tax team too often doesn’t until there’s a problem. Close that knowledge gap now.

Third, re-rank your project pipeline on a real after-tax basis. Updated incentive assumptions, global minimum tax, domestic versus cross-border production — run all the numbers again. Some projects that looked marginal six months ago may look very different now, and vice versa.

Fourth, build a windfall tax playbook before you need one. The data you’d need to defend your profit levels and capital allocation decisions takes time to pull together. Don’t leave that work until the week the legislation drops.

Fifth — and this is the one that gets skipped most often — make sure the company’s tax, treasury, and trading groups are talking to each other in real time. Hedging decisions, financing structures, physical flow changes — all of these have tax consequences, and they’re happening fast right now.

One final thought

Corporate tax departments that come out of this looking good won’t be the ones that predicted the conflict. They’ll be the ones who translated what’s happened into specific, actionable data and numbers for their leadership — presented quickly, clearly, and with their own company’s footprint in mind.

That’s the brief. Now go build it.

You can find more of our coverage of the impact of the ongoing War in Iran here

Key insights:

• • • Possibilities vs. practicality — There is a growing frustration gap between what corporate tax professionals want to achieve and what their current technological tools will allow.

    • Expectations about AI — Tax professionals have significantly accelerated the timeframe in which they expect AI to become a central part of their workflow.

    • Proactive progress — Automation is enabling a gradual shift toward more strategic, proactive tax work, although not as quickly as many tax professionals would like.

The recently released , from the Thomson Reuters Institute and Tax Executives Institute, reveals that while automation of routine tax functions is indeed enabling a long-desired shift toward more strategic, proactive tax work in some corporate tax departments, a majority of tax leaders surveyed say upgrading their department’s tax technology is still a relatively low priority at their company.

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2026 Corporate Tax Department Technology Report

The report surveyed 170 tax leaders from companies of all sizes to find out how corporate tax professionals are using technology, overcoming obstacles, and planning for the future.

A growing “frustration gap”

In general, the report found that while many companies (especially larger ones) are actively upgrading their tax department’s technological capabilities, there is a growing frustration gap between what tax professionals know they can accomplish with more robust technologies and what their current tools allow them to do.

Adding to this frustration is a growing discrepancy between the additional budget and resources tax departments hope to get each year and the harsher reality they often face. Indeed, even though tax leaders remain optimistic that their budgets and capabilities will expand and improve in the coming years, fewer than half of the respondents surveyed said their departments received a budget increase last year, and many saw budget cuts.

Further, the report shows that the prospect of incorporating ever more sophisticated forms of AI and AI-driven tools into tax workflows is also very much on the minds of tax professionals. Even though the actual usage of AI in corporate tax departments is still relatively low, the report reveals that tax professionals now expect AI become a central part of their workflow within one to two years, much faster than they did in last year’s report.

Indeed, as the report explains, this expectation of more imminent AI adoption represents a significant shift in attitude, because most corporate tax departments are rather circumspect about how, when, and why they incorporate new tech tools into their established routines.

If today’s technological capabilities continue to accelerate, companies that have been slow to invest in the infrastructure necessary to keep pace may soon find themselves struggling to catch up with their more tech-savvy counterparts, the report warns.

Moving toward more proactive work, albeit slowly

For companies that have invested in the technological infrastructure necessary to support advanced tax technologies, the payoff is becoming increasingly evident.

According to the report, about two-thirds (67%) of tax professionals surveyed said their company’s investment in technology had enabled a shift toward more proactive tax work within their departments. This shift is particularly noticeable at large corporations, at which, unsurprisingly, investment in tax technology has been more generous.

The 2026 Corporate Tax Department Technology Report also explores other aspects of corporate tax departments, including their hiring practices, tech training, purchasing strategies, what they see as the most popular tech tools for tax, and numerous other factors that affect how tax departments operate.

You can download

a full copy of the Thomson Reuters Institute’s here

Key takeaways:

• • • Companies should act fast on refunds — Companies that paid IEEPA-based duties have potential refund claims, but statutory deadlines are ticking. Business leaders should map exposure, quantify opportunities, and file protective claims now.

    • Remember, other tariffs still apply — This decision only invalidated IEEPA-based tariffs. Tariffs based on Sections 232, 301, and 122 of the 1974 Trade ActĚýremain in force, and the administration is already signaling plans for new global tariffs.

    • Businesses should update their financial models — Tariff refunds flow through cost of goods sold, which affects taxable income and effective tax rates. Business leaders should review their transfer pricing models and contracts to determine which parties receive refund proceeds.

The U.S. Supreme Court’s recent ruling striking down the tariffs that the Trump Administration based on the International Emergency Economic Powers Act (IEEPA) creates immediate refund opportunities for businesses that paid billions of dollars in now-invalidated duties. However, the administration’s pivot to alternative tariff authorities means the trade policy landscape is shifting rather than settling.

Now, corporate tax and trade leaders must move quickly to preserve refund claims while building resilient strategies for the next wave of tariff changes that are already fully in motion.

What actually happened

In , the Supreme Court said last month that President Donald J. Trump went too far by using the IEEPA — a statute designed for genuine national emergencies — to impose broad, peacetime tariffs. The Court’s message was blunt: If you want sweeping tariff authority, get the U.S. Congress to give it to you explicitly — IEEPA doesn’t cut it.

This ruling invalidated the tariffs that relied solely on IEEPA, including certain reciprocal global duties and some measures targeting Canada, Mexico, and China. However, here’s the catch: Other tariff regimes — such as those outlined in Sections 232, 301, and 122 of the TradeĚýActĚýofĚý1974Ěý— are still standing. Those weren’t touched by this decision, and they’re not going away.

Check outĚýĚýfor more on the Supreme Court’s tariff decision here

Further, the administration isn’t sitting still either. There’s already talk of pivoting to Section 122 to impose a new 10% global tariff. So, while one door closed, another may be opening, which means the legal landscape is shifting, not settling.

Why this matters right now

There are several important factors to consider in the wake of this decision, including:

Start with the money — If your company paid IEEPA-based duties, your effective tariff rate on many imports just dropped. That , changes your margin picture, and could shift pricing dynamics across the retail, consumer goods, manufacturing, and automotive sectors.

Then there’s the refund potential — Billions of dollars were collected under tariffs that are now unlawful. The government won’t write checks automatically — indeed, the administration has already signaled it will fight broad refund claims — but for individual companies, the cash at stake could be significant.

Don’t overlook your contracts — Many commercial agreements include tariff pass-through clauses, price adjustments, and indemnities. Those provisions will determine which parties actually gets the money: the importer of record, the customer, or someone else in the chain. If you restructured your supply chain around the old tariff regime, you may need to rethink those decisions, too.

What businesses should do first

There are several steps business leaders should undertake to move forward in this new environment, including:

Map your exposure — Tax and trade teams need to pull multi-year import data by Harmonized Tariff Schedule (HTS) code, country of origin, and legal authority. Figure out which entries were hit specifically by IEEPA-based tariffs, as opposed to Section 232 or 301 duties, which again, are still in effect.

Quantify the opportunity — Calculate total IEEPA duties paid by entity, jurisdiction, and period. Include a rough estimate of interest, prioritize the highest-value lanes, and flag any statutory deadlines for protests or post-summary corrections. Missing a deadline isn’t something you can easily fix later.

Preserve your rights — If you’ve already filed test cases or joined class actions, revisit your strategy with counsel. If you haven’t, evaluate quickly whether to file protests, post-summary corrections, or other protective claims with the U.S. Customs & Border Protection. These procedures will evolve, of course, but the clock already is ticking.

Get the right people in the room — This isn’t just a tax problem or a trade compliance problem. Stand up a cross-functional working group that includes tax, customs, legal, finance, supply chain, and investor relations. Agree on who owns what, how you’ll share data, and how you’ll communicate, especially if the refund could move the needle on earnings or liquidity.

Financial reporting and tax implications

Most importantly, you need to reassess your tariff-related balances and disclosures. If refunds are probable and you can estimate them, that may affect liabilities, expense recognition, and reserves. Even if the accounting is murky, material claims may need to be discussed in your report’s Management’s Discussion & Analysis (MD&A) section or in footnotes.

On the tax side, tariff refunds and lower ongoing duties flow through cost of goods sold (COGS), which changes taxable income and your business’s effective tax rate. Timing matters: When you recognize a refund for book purposes may not match when it hits for tax, creating temporary differences that need Accounting Standards Codification 740 analysis.

And don’t forget transfer pricing. Many intercompany pricing models were built during the high-tariff period and may embed those costs in tested party margins. If tariffs fall or refunds materialize, those models and the supporting documentation may need updates. Review intercompany agreements that allocate customs and tariff costs to make sure they align with both the economics and the legal entitlement to possible refunds.

Think beyond the refund

Yes, the immediate focus is on getting your company’s money back and staying compliant — but this is also a moment in which more strategic thinking is required, including:

Run scenarios — Business show run their models to see what happens if IEEPA tariffs disappear and aren’t fully replaced. Model what happens if a broad 10% global tariff lands under Section 122. Model what happens if country- or sector-specific measures expand. For each scenario, stress-test your gross margin, cash flow, and key supply chain nodes.

Revisit your sourcing strategy — Some nearshoring or supplier diversification moves you made under the old tariff structure may no longer make sense. Others may still be smart as a hedge against renewed trade tensions. The tax team needs to be part of these conversations — not just because tariffs affect cost, but because new structures reshape your effective global tax rate, foreign tax credit position, and your base erosion and profit shifting (BEPS) exposure.

Fix your data and governance — Trade policies can move fast and unpredictably. If you can’t quickly pull clean import data, run classification reviews, or model your exposure across scenarios, then you’re simply flying blind. Now is a good time to fix that.

The bottom line

The Supreme Court’s decision closed one chapter of the president’s tariff story, but it didn’t end it. For corporate tax and trade leaders, the message is straightforward: Grab the refund opportunity, protect your position, and use this moment to build a more resilient strategy for whatever comes next.

Because if there’s one thing we’ve learned, it’s that the next round of tariff changes is already on its way.

For more on the impact of tariffs on global trade, you can download a full copy of the Thomson Reuters Institute’s recent 2026 Global Trade ReportĚýhere

Key takeaways:

• • • Tax departments lack resources and confidence — More than half (58%) of tax departments are under-resourced, and 59% are not confident that they can upgrade their tax technology over the next two years.

    • Under-resourced departments incur more penalties — At least half of respondents from under-resourced tax departments say their departments incurred penalties over the past year, compared to only about one-third of those from properly resourced departments.

    • Making the shift to proactive planning and value creation — For many tax departments, the winning model blends in-house expertise, targeted external support, and a coherent tech/AI stack that allows teams to shift from tactical compliance to proactive planning and strategic value creation.

Under-resourced corporate tax departments spend more of their budget on external support compared to well-resourced teams — yet they’re more likely to incur penalties and less confident in forecasting, according to the Thomson Reuters Institute’s .

Given this, the problem isn’t a lack of spending — it’s the operating model. With respondents from 58% of tax departments saying they are under-resourced, 59% saying they lack the confidence needed to upgrade their existing tax technology over the next two years, and most spending more than half their time on reactive compliance work when they’d prefer to focus on strategic planning, clearly the gap between ambition and reality has never been wider.

The answer isn’t working harder or throwing more money at consultants, however. It’s building a hybrid ecosystem of people, platforms, and partners designed to shift capacity from firefighting to foresight.

The Groundhog Day problem

Every year feels the same: New tax legislation (such as the One Big Beautiful Bill Act or Pillar 2), new compliance burdens, new geopolitical uncertainty — coupled with the same old constraints. Too much work, not enough time, and technology that lags.

When deadlines hit, under-resourced teams rely on two blunt levers: overtime and reactive outsourcing. Internal staff end up working longer hours, and external providers plug the gaps at short notice. This model is breaking departments and it’s breaking down itself.

Under-resourced departments are significantly more likely to incur penalties, with 50% of respondents saying their under-resourced department had been penalized in the past year, compared to just 34% of respondents from well-resourced departments that say that, according to the report.

Further, under-resourced department respondents said they were less confident in their ability to forecast accurately, with just 26% saying their ability to forecast accurately was “very likely” compared to 43% of well-resourced department respondents. Ironically, under-resourced departments also spend more on external support as a percentage of budget (44%) compared to 37% for well-resourced departments. Clearly, spending more doesn’t solve structural problems — it often masks them.

Meanwhile, tax professionals report spending more than half their time on tactical or reactive work, even though they would prefer to spend up to two-thirds of their time on strategic analysis. Not surprisingly, when the team is locked into manual reconciliations and last-minute fixes, it’s nearly impossible to influence business decisions or shape strategy.

Why “all in-house” or “all outsourced” no longer works

When more work is moved onto the plates of the internal tax team, all in-house can often come to mean all heroics — talented people drowning in compliance volume with no time to use the analytical tools already on their desks. Conversely, all outsourced risks hollowing out the department’s institutional knowledge and weakening its seat at the table.

A hybrid model asks better questions: What kind of work is this, and where does it create the most leverage? These questions can be used to determine where and to whom work should go. For example, high-volume, rule-based, recurring tasks are prime candidates for automation, shared services, or managed services under strong tax oversight; while complex, judgment-heavy, strategically sensitive work should remain anchored in-house, with external advisors extending capacity and offering specialized insight.

Thus, the best model for a modern corporate tax department is a hybrid ecosystem — not a fixed organizations chart, but a deliberate blend of internal expertise, enabling technology, and external capability partners.

Four layers of the hybrid ecosystem

This hybrid ecosystem can be delineated into four layers, each bringing their own insight and value:

1. 1. 1. People and roles redesigned — High-performing tax functions invest in analyst and tax-tech roles that connect tax to enterprise resource planning (ERP) systems, data hubs, and analytics, thus freeing technical experts from manual data work. Senior professionals then become embedded advisors to finance, treasury, and the business, not just compliance reviewers.
      2. Processes segmented into “run” and “change” — The biggest barriers to strategic work are excessive volume, heavy compliance burdens, limited resources, and time pressure. Modern tax departments respond by explicitly segmenting work in which run the business processes are documented, standardized, and increasingly automated or pushed into shared or managed service models. Change the business work remains tightly linked to senior tax staff.
      3. Technology becomes the data spine — More than half of respondents say they expect above-normal increases in their tax technology budgets, and more than half say their main resourcing strategy is introducing more automation. The goal isn’t collecting point solutions; rather, it’s building a coherent data spine that includes ERP integration, tax-specific data models, consistent workflow tooling, and strategic platforms that flex as regulations shift.
      4. AI act as an accelerator — Two-thirds of tax departments aren’t yet using generative AI (GenAI), according to the report. And among the one-third that are, usage clusters around research, document summarization, drafting, and some analytical support. The next step up the AI chain is for departments to move from individual experiments to standardized, governed workflows that scan legislation, prepare first drafts of memos, or interrogate large data sets for anomalies.

What high-performing hybrid tax departments do next

Departments that feel well-resourced, allocate more time for their professionals to conduct proactive work, and invest deliberately in technology and skills are significantly more confident in their ability to forecast accurately, avoid penalties, and minimize tax liabilities, the report shows.

Indeed, these high-performing hybrid tax departments:

• • • invest ahead of crises in people, tech, and processes
    • treat external providers as capability partners, not emergency relief
    • actively protect time for strategic work by automating or outsourcing routine tasks
    • insist on a durable seat at the strategy table, not just one for compliance reporting
    • experiment with automation and AI in focused, repeatable use cases

It is worth noting that smaller companies (those under $50 million in annual revenue) and the largest one (those with more than $5 billion in revenue) are leading the way by securing leadership buy-in early and leveraging specialized external expertise rather than trying to build everything in-house. Midsize companies, by contrast, are more likely to rely on in-house teams to lead automation efforts and less likely to use third-party vendors — a cautious approach that risks having them fall too far behind to catch up.

The message: Design the ecosystem, don’t just work harder

For corporate tax professionals, the message may be harsh but hopeful: You cannot work your way out of structural constraints by effort alone. Rather, a well-designed hybrid ecosystem can turn those constraints into a catalyst that will allow the department to deliver more value to the business. In fact, the modern corporate tax department is hybrid by necessity; but the question is whether it’s hybrid by design — or just by accident.

You can learn more about the challenges facing modern corporate tax departments here