Businesses are facing operational challenges and higher costs due to complex regulatory environments, according to BDO’s Global Tax Outlook Report. 81% report increased tax authority queries compared to 2023.

Survey of 500 global tax leaders shows rising investment in technology, hybrid outsourcing, and AI in tax operations. 50% identify navigating shifting regulations as top challenge.

OECD’s Pillar Two framework and digital reporting drive compliance workloads and potential risk. 61% report missing tax filing deadlines, 50% admit errors in returns.

Companies are investing in technology, upskilling workforce, and making compliance a strategic priority. 66% expect compliance costs to rise, with more funds allocated to technology upgrades and staff.

62% plan to enhance training initiatives, 47% to increase spending on outsourced services. 70% have adopted AI tools for efficiency and accuracy improvements in tax operations.

51% anticipate reallocating employees to strategic roles as AI adoption grows. 71% use third-party providers for tax compliance support, highlighting flexibility, quality, and focus on strategic activities as key advantages.

BDO Global Tax head Niek De Haan emphasizes the need for action in 2026 and praises businesses for proactive responses to evolving tax compliance expectations. Businesses are investing to stay ahead in a rapidly changing landscape.

Read more at Yahoo Finance.: Regulatory demands increasing costs for businesses: BDO