ARTICLE · 04 OCTOBER 2018

The Utter Digital Transformation Of Operational Tax Compliance

KPMG Luxembourg

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During the past 10 years, the banking and asset management sectors have gone through a restructuring phase, following the 2008 financial crisis which prompted major banking groups to redefine their strategies.

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Jean Kizito

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During the past 10 years, the banking and asset management sectors have gone through a restructuring phase, following the 2008 financial crisis which prompted major banking groups to redefine their strategies. As is well known, a huge increase in regulatory and tax compliance obligations followed the crisis, affecting banks and investment managers heavily.

In the same period, however—and not at all accidentally—the digital transformation reached a new stage of maturity, enabling new efficiencies and creating new channels to the market. Historically, tax practices and tax reporting in particular have been low-tech and paper-based, but no longer: digitalised operational tax compliance has seen to that. "Operational tax" broadly covers withholding tax (WHT), transactional taxes, and compliance obligations (due diligence and tax/investor reporting). Compliance officers today can now rely on regtech products and services, which come generally in three varieties:

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