Regulatory demands increasing costs for businesses: BDO

Businesses worldwide are struggling with increasing operational challenges and higher costs brought connected by analyzable regulatory environments, according to BDO’s latest Global Tax Outlook Report.

The probe highlights an uptick successful clip spent connected taxation authorization queries, with 81% of businesses reporting much specified interactions compared to 2023.

The survey of 500 planetary taxation leaders finds rising concern successful exertion and skills, increasing adoption of hybrid outsourcing, and broader usage of AI successful taxation operations.

Half of the respondents (50%) identified navigating shifting regulations arsenic their astir pressing challenge.

Recent developments, specified arsenic the OECD’s Pillar Two model and mandatory integer reporting, are cited arsenic drivers down compliance workloads and an summation successful imaginable risk.

The study added that operational issues linked to this regulatory situation are besides evident with 61% of participants reporting missing deadlines for taxation filings, portion 50% acknowledging errors successful their returns.

These missteps tin person repercussions, including audits and strained relationships with authorities.

To code these obstacles, companies are expanding investments successful some technologies, upskilling their workforce and making compliance a halfway facet of their organisational strategy.

The study notes that astir two-thirds (66%) expect the outgo of compliance to proceed rising implicit the adjacent twelvemonth arsenic they allocate much funds towards exertion upgrades and further staff.

Hybrid outsourcing—blending in-house and outer expertise—is becoming progressively common. While 62% of businesses program to heighten grooming initiatives, 47% are acceptable to boost spending connected outsourced services.

The survey added that 70% of respondents person adopted AI tools for cognition absorption and information processes, with expectations that these technologies volition amended ratio and accuracy implicit the adjacent fewer years.

More than fractional (51%) of them expect reallocating employees to much strategical roles arsenic AI adoption grows.

The usage of third-party providers for taxation compliance is widespread, with 71% employing outer enactment to supplement interior teams. Flexibility (69%), prime (66%), and the accidental to absorption connected strategical activities (48%) were highlighted by main fiscal officers arsenic cardinal advantages of outsourcing elements of taxation compliance work.

BDO Global Tax caput Niek De Haan said: “These findings underscore a cardinal shift, taxation compliance is evolving rapidly and truthful are expectations connected taxation leaders.”

Haan added: “The information shows that 2026 volition request to beryllium a twelvemonth of enactment for many. What’s encouraging is that businesses are responding proactively, investing to enactment ahead.”