Tax departments everywhere are expecting tax technology and AI to help them keep pace with the growing demands of the digital age
The Thomson Reuters 2025 Corporate Tax Department Technology Report offers the latest research on how corporate tax departments are incorporating new technologies into their operations, as well as the many challenges tax departments face in adopting new technological systems and processes.
Historically, corporate tax functions have been slow to embrace new tax technologies, due primarily to budget constraints, inadequate technical infrastructure, a lack of tech-savvy personnel, and cultural resistance to change. In the past few years, however, the digitalization of global tax regimes and increasing demands for more real-time data have made certain tax technologies (such as automation) indispensable, and other technologies such as artificial intelligence (AI) more attractive.
The 2025 report shows that people are starting to accept new tax systems, especially automation and AI. They are starting to see the possibilities that these systems can bring. 94% of this year’s survey respondents said they feel “hopeful” or “excited” about the future of tax technology. 88% of the people who answered also said they expect AI to be part of their daily work in the next five years. However, current AI use in corporate tax departments is still very low.
Jump to ↓
| Current corporate tax department challenges |
| Rising budgets and interest in tech |
| The growing importance of AI in corporate tax departments |
| Technology and training: time for a plan |
Current corporate tax department challenges
Structural impediments to the broader adoption of tax technologies still exist, however. In particular, many tax departments are still thought of as a back-office function, so they have yet to secure a meaningful seat at the leadership table, where decisions about enterprise-wide technology acquisitions are made. At small and mid-size organizations, however, the culprit holding back much-needed tech initiatives isn’t just budget issues, it’s often a lack of staff with technical knowledge or change-management skills.
As a result, many people who took this year’s survey were frustrated because their department didn’t have the power to make decisions. They also said that their department’s tech strategy and capabilities are not as good as other departments and the business world.
On the technological maturity scale, more than half (57%) of respondents described their organization’s tech posture as chaotic or reactive, whereas only 6% said it was optimized or predictive—the highest level on the technological transformation curve. The rest are caught in the muddy middle, where ambitions and budgets often clash.
Rising budgets and interest in tech
On the bright side, technology budgets are growing. 74% of this year’s respondents said they expect their tech budgets to rise in the next 3-5 years. Companies with more than $1 billion in revenue have a big advantage in this area. They are much more likely to invest in new technology applications and training than smaller companies. Not surprisingly, those working at larger companies are more likely to have a positive view of their organization’s tech resources and overall tech strategy.
The types of technology companies are interested in acquiring appears to be changing as well. Though tools for such tasks as indirect tax compliance, tax provision, and indirect tax determination are still the most common tax technologies in use, newer tech applications such as digital tax reporting, tax analytics, and key performance indicators (KPIs) are gaining traction, albeit slowly.
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The growing importance of AI in corporate tax departments
People are also very interested in using artificial intelligence (AI) for tax work. 74% of people who answered said that automating processes that can be repeated is a medium or high priority for their department. More automation will affect daily workflows. But many organizations see automation of simple tasks as an opportunity to free up tax professionals to do more important strategic work.
Interest in the possibilities for generative artificial intelligence (GenAI) is also quite high, though the majority of respondents (84%) said they are still “considering” or “exploring” the technology. Only 6% of respondents said their departments were “active” users of GenAI. However, there is widespread agreement that various forms of AI will play an increasingly important role in the years to come.
Technology and training: time for a plan
In general, the results of this year’s survey are not dramatically different from last year’s, though one thing is clear: the acceptance and adoption of technology in the tax world—be it cloud-based services, automation, AI, GenAI, or tax-specific software—is gathering speed. Larger companies are leading the charge, but mid-size and smaller companies are quickly jumping on the bandwagon if only to avoid getting left behind.
There is also a growing awareness that any investment in technology needs to be accompanied by dedicated training efforts and the hiring of tech-savvy personnel. At the moment, many departments are tasking individuals with a hybrid tax/technology role or leaning on IT personnel to manage technology transitions. However, the tax department of the future will be staffed by people who are comfortable working with these emerging technologies, so the payoff for investing in training and upskilling now will be a more capable, resilient department down the road.
Indeed, tax departments that want to improve their technology profile need more than just the latest software—they need a detailed tech strategy, budget planning, human resources involvement, regular training, change management, and leadership that understands the importance of coordinating these disparate efforts. Few tax departments have mastered all the elements of a successful technology transition, but the need for it is clear, and the desire is there.
Standing still is not an option.
Explore how corporate tax departments are leveraging advanced technology and external consultants to gain a competitive advantage. Check out our 2025 Corporate Tax Department Technology Report for essential insights.
2025 Corporate Tax Technology Report
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