Tax compliance now depends on ERP data quality, not just reporting tools
A new SAPinsider survey shows tax leaders rank data quality and regulatory change as their top operational challenges. AI adoption and e-invoicing mandates are reshaping tax strategy, but automation and master data remediation must come before advanced analytics.
Tax compliance is no longer a narrow reporting problem. SAPinsider’s Global Tax Management benchmark report, based on a survey of tax leaders between February and June 2026, shows that tax teams face pressure from AI adoption, real-time reporting mandates, and fragmented ERP landscapes. Data quality and regulatory change are the leading operational challenges, and tax teams are prioritizing process automation and master data ownership before pursuing advanced analytics or AI.
Tax data quality now rivals regulatory change as the top operational challenge
A new SAPinsider Global Tax Management benchmark report shows tax leaders are treating compliance as a complex operating problem, not a narrow statutory reporting issue. The survey of SAPinsider’s global community, conducted between February and June 2026, reveals that 37% of respondents cite keeping pace with country-level regulatory changes and tax-sensitized data quality as their top two operational challenges.
Tax teams cannot respond quickly to new mandates or automate compliance with confidence if tax codes, jurisdictions, product classifications, entity structures, exemptions, customer data, supplier data, and document flows are inconsistent across systems. Modern tax management depends on the quality, consistency, and accessibility of operational data.
AI adoption and e-invoicing mandates are reshaping tax strategy
The strongest force shaping tax strategy for 2026 through 2028 is AI adoption across the business. 42% of respondents cite AI adoption and advancement as the primary force shaping tax strategy. Finance, IT, and business leaders are asking how AI can accelerate compliance, reporting, audit preparation, classification, exception handling, and analytics.
E-invoicing and real-time reporting mandates follow closely, cited by 35% of respondents. Tax authorities are moving closer to live transaction flows, which reduces the time available to correct errors after the fact. Compliance is increasingly happening at the point of transaction, not at the end of a reporting cycle.
Business growth, supply chain restructuring, and regulatory or tariff volatility each registered at 27%, reinforcing that tax has become a moving target because the business keeps moving.
Automation and standardization come before AI and advanced analytics
Tax teams understand the sequencing problem. The top strategic priority for the next 24 months is automating high-volume processes, cited by 41% of respondents. Standardizing processes with global templates follows at 39%, and master data remediation and ownership comes next at 35%.
AI and advanced analytics still rank strongly, at 33%, but they sit behind automation, standardization, and data remediation. Tax teams appear to recognize that AI can amplify a mature operating model, but it cannot repair one that lacks consistent process and data governance.
SAP tax architecture is becoming more platform-driven
Half of respondents say they have SAP S/4HANA embedded analytics in scope for tax and compliance for the next 24 months. SAP Document and Reporting Compliance is in scope for 42%, while SAP Business Technology Platform is in scope for 34%.
Tax teams are not only looking for standalone compliance tools. They are looking for an architecture that connects core ERP data, statutory reporting, e-invoicing, analytics, integration, and third-party tax engines without creating another layer of fragmentation.
Vertex and Thomson Reuters ONESOURCE each show 37% adoption among respondents, followed by a broader field of tax, e-invoicing, and compliance specialists. However, a meaningful share of respondents are not using, or are not sure whether they are using, a third-party tax engine. That uncertainty is a warning sign for ERP leaders.
What to do next
ERP and finance leaders should treat tax codes, jurisdiction mappings, product classifications, customer data, supplier data, and document flows as part of the compliance control environment, not as back-office configuration details. Tax technology stacks have to be rationalized and governed before they can support faster regulatory response, AI-assisted compliance, or real-time reporting. SAP customers who use the next 24 months to clarify which tax capabilities belong in the core, which require third-party engines, and how governance will work across both will be better prepared for future modernization initiatives.