Brussels, 4 November 2025 – Increasing regulatory complexity is driving operational challenges and rising costs for businesses, BDO’s Global Tax Outlook Report has found. The new research states that 81% of businesses are spending more time on tax authority queries compared to 2023, leading to a strain on resources and quality.
“These findings underscore a fundamental shift, tax compliance is evolving quickly and so are expectations on tax leaders,” said Niek De Haan, Global Head of Tax at BDO. “Tax compliance is no longer about ticking boxes. It’s building resilience, integrating tax into business strategy, and leveraging technology to stay ahead of regulatory change. The data shows that 2026 will need to be a year of action for many. What’s encouraging is that businesses are responding proactively, investing to stay ahead.”
The new research, based on a survey of 500 global tax leaders, reveals investments in technology and skills are accelerating, hybrid outsourcing is becoming the norm, and AI is steadily moving up the value chain.
Regulatory Pressures: A Moving Target
Navigating the regulatory landscape is the top challenge cited by half (50%) of businesses. The complexity of global tax frameworks, including OECD’s Pillar Two and digital reporting mandates, is contributing to heavier workloads and greater risk exposure.
This regulatory load is compounded by operational challenges. Nearly two thirds (61%) of respondents report missing filing deadlines, and one in two (50%) admit to inaccurate returns - errors that can trigger costly audits and impact relationships with tax authorities.
Despite these challenges, businesses are addressing operational weaknesses, embedding compliance into strategic planning and investing in technology to improve accuracy.
The Rising Compliance Bill
The cost of compliance is growing, driven by regulatory pressure. Two-thirds (66%) of businesses expect increases over the next 12 months due to additional technology and headcount needs.
Leaders are not standing still: 62% are boosting investment in skills and training, and 47% are increasing spending on outsourced solutions. This shift reflects a broader trend toward integrated strategies that combine technology and external expertise to deliver compliance excellence.
AI: A Game-Changer or a Work in Progress?
Businesses are implementing AI to support tax planning and scenario analysis, though most organisations are still at the beginning of their journey.
Almost three-quarters of respondents (70%) are using AI for knowledge and data management, with most expecting significant improvements in accuracy and efficiency within three years. In addition, 51% of business leaders expect AI to enable them to redeploy people into high-value, strategic work, with the goal of increasing quality and productivity.
Outsourcing on the Rise: Flexibility Over Formula
Outsourcing for tax compliance is on the rise as companies seek to address capacity and resourcing challenges, with 71% adopting some form of external support. Hybrid approaches combining in-house expertise with outsourced services are growing, providing flexibility and access to specialist knowledge.
CFOs cite flexibility (69%), quality of service (66%), and creating time for strategic work (48%) as some of the key benefits to outsourcing. This collaborative mindset is helping businesses turn outsourcing into an advantage rather than a cost-cutting exercise.
“These findings underscore a fundamental shift, tax compliance is evolving quickly and so are expectations on tax leaders,” said Niek De Haan, Global Head of Tax at BDO. “Tax compliance is no longer about ticking boxes. It’s building resilience, integrating tax into business strategy, and leveraging technology to stay ahead of regulatory change. The data shows that 2026 will need to be a year of action for many. What’s encouraging is that businesses are responding proactively, investing to stay ahead.”
The new research, based on a survey of 500 global tax leaders, reveals investments in technology and skills are accelerating, hybrid outsourcing is becoming the norm, and AI is steadily moving up the value chain.
Regulatory Pressures: A Moving Target
Navigating the regulatory landscape is the top challenge cited by half (50%) of businesses. The complexity of global tax frameworks, including OECD’s Pillar Two and digital reporting mandates, is contributing to heavier workloads and greater risk exposure.
This regulatory load is compounded by operational challenges. Nearly two thirds (61%) of respondents report missing filing deadlines, and one in two (50%) admit to inaccurate returns - errors that can trigger costly audits and impact relationships with tax authorities.
Despite these challenges, businesses are addressing operational weaknesses, embedding compliance into strategic planning and investing in technology to improve accuracy.
The Rising Compliance Bill
The cost of compliance is growing, driven by regulatory pressure. Two-thirds (66%) of businesses expect increases over the next 12 months due to additional technology and headcount needs.
Leaders are not standing still: 62% are boosting investment in skills and training, and 47% are increasing spending on outsourced solutions. This shift reflects a broader trend toward integrated strategies that combine technology and external expertise to deliver compliance excellence.
AI: A Game-Changer or a Work in Progress?
Businesses are implementing AI to support tax planning and scenario analysis, though most organisations are still at the beginning of their journey.
Almost three-quarters of respondents (70%) are using AI for knowledge and data management, with most expecting significant improvements in accuracy and efficiency within three years. In addition, 51% of business leaders expect AI to enable them to redeploy people into high-value, strategic work, with the goal of increasing quality and productivity.
Outsourcing on the Rise: Flexibility Over Formula
Outsourcing for tax compliance is on the rise as companies seek to address capacity and resourcing challenges, with 71% adopting some form of external support. Hybrid approaches combining in-house expertise with outsourced services are growing, providing flexibility and access to specialist knowledge.
CFOs cite flexibility (69%), quality of service (66%), and creating time for strategic work (48%) as some of the key benefits to outsourcing. This collaborative mindset is helping businesses turn outsourcing into an advantage rather than a cost-cutting exercise.