Global Tax Outlook 2025

The Global Tax Outlook is BDO’s flagship report, which explores the key issues, priorities and innovations shaping tax today and in the future.

BDO’s report, Global Tax Outlook 2025, arrives at a moment of seismic change in the tax landscape as it explores the forces transforming global tax compliance and strategy. As regulatory complexity surges, operational costs climb and AI reshapes the tax function, tax leaders are being called upon to rethink their approach. Compliance is no longer a box-checking exercise — it’s a strategic imperative. 

Based on insights from 500 tax managers across a range of industries, including energy, healthcare, manufacturing, and professional services, the 2025 report examines how tax leaders are responding to increasing pressure and new opportunities.

Drawing on insights from 500 senior tax executives across industries including energy, healthcare, manufacturing and professional services, the 2025 report explores how tax leaders are responding to mounting pressures and emerging opportunities.

Key findings include:

• Regulatory pressure is escalating

Regulatory pressure is straining resources and elevating risk, with 81% of businesses reporting spending more time responding to tax authority queries than in 2023. At the same time, half (50%) of businesses cite navigating the regulatory environment as their biggest challenge. The complexity of global tax frameworks, including the OECD's Pillar 2 and digital reporting obligations, contributes to increased workloads and greater exposure to risk. This regulatory burden is compounded by operational challenges. Nearly two-thirds (61%) of respondents report missing filing deadlines, and one in two (50%) admit to filing incorrect tax returns – errors that can trigger costly audits and affect relationships with tax authorities. Despite these challenges, businesses are addressing their weaknesses, incorporating compliance into strategic planning, and investing in technology to improve accuracy.
 

“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.

 

• Rising compliance costs

Regulatory pressure is also driving up compliance costs. Two-thirds (66%) of businesses expect their costs to increase over the next 12 months, mainly due to additional technology and staffing needs. Executives are not sitting idly by: 62% are increasing investment in skills and training, and 47% are increasing spending on external solutions. This shift reflects a broader trend toward integrated strategies that combine technology and external expertise to achieve a high level of compliance.
 

• AI is moving beyond automation

AI is evolving from task automation to strategic enablement, altering how tax departments operate and deliver value. Businesses are not resting on their laurels and are already implementing artificial intelligence to support tax planning and scenario analysis. However, most organizations are still at the beginning of their journey. Nearly three-quarters of respondents (70%) use 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 artificial intelligence to enable them to move people to high-value strategic work to increase quality and productivity. However, there is still an assumption among respondents that the shift toward improving its strategic impact and quality of tax compliance will not happen immediately.
 

• Hybrid outsourcing is becoming standard

Nearly half of respondents are increasing investment in outsourced solutions that blend internal expertise with external support, particularly for corporate and VAT compliance. This flexible model demands agility and a readiness to pivot as needs evolve, with many anticipating further shifts towards outsourcing.CFOs cite flexibility (69%), service quality (66%), and freeing up time for strategic work (48%) as the key benefits of outsourcing. This collaborative approach helps businesses turn outsourcing into an advantage rather than a cost-cutting measure.
 

• Future-ready compliance is strategic

With 66% of businesses expecting compliance costs to rise, resilience, adaptability and integration with broader business strategy are essential. Harnessing technology is crucial to compliance—with tax authorities increasingly using technology to facilitate easier and quicker disclosures that can expose errors, businesses should invest in robust and integrated data strategies that are linked to compliance and foster stronger collaboration with the tax authorities.

The report underscores a clear shift: tax leaders must act decisively to embrace innovation, invest in technology and align tax with enterprise goals to stay ahead in a rapidly changing environment.