New requirements for digital tax reporting implemented by authorities in Central European countries will lead to the streamlining of tax controls over the next three to five years, according to 75% of companies, but will provide authorities with increased access to taxpayers' financial and accounting information (62%), according to the Deloitte Central Europe Tax Technology Report conducted in 15 countries in the region, including Romania.

In this context, 69% of participants stated that the decision to invest in digital tax management solutions is primarily motivated by the need to meet the increasing requirements of tax authorities regarding indirect tax reporting.

At the same time, 68% of participants said that investments in technology are also driven by the desire to improve automation in tax compliance processes and streamline procedures, thus freeing up human resources for other activities.

The percentage is even higher (over 80%) in countries that are implementing regulations involving major changes in tax compliance, such as Poland and Romania, but lower in Hungary or the Czech Republic, where such transformations are not taking place.

On the other hand, nearly half of the companies (45%) are concerned about their ability to adapt and update their internal systems quickly enough to meet the evolving requirements of digital reporting.

Additionally, the fact that the data requested by authorities varies from country to country (related to real-time reporting and electronic invoicing in Hungary, Romania, Serbia, and Poland, SAF-T reporting in Romania, Poland, and Lithuania, or reporting local sales and purchases in the Czech Republic, Hungary, and Slovakia) generates additional complications.

"The implementation of new reporting systems requires significant efforts from both the authorities and taxpayers who, as this study also shows, face multiple challenges related to the complexity of procedures and the associated costs.

However, the digitization of the relationship between taxpayers and tax authorities could no longer be avoided in the current global economic context, where the volume of data to be reported and subsequently analyzed is exponentially increasing, and the speed of response is essential in detecting cases of tax evasion and limiting the losses incurred by this phenomenon to the state budget.

In Romania, the process is ongoing, and it is crucial to conclude it successfully so that the collected data can be analyzed efficiently, and the benefits - less frequent, faster, and less burdensome controls for compliant taxpayers, as well as increased revenue for the state budget - can justify the compliance effort.

To this end, it is essential for the tax authority to invest in state-of-the-art IT equipment to have the capacity to receive and process data quickly enough to achieve the expected effects," said Vlad Boeriu, Partner Coordinating Tax and Legal Services at Deloitte Romania.

According to the report, to allow authorities increased access to financial and accounting information, companies need to integrate their internal systems with those of the tax administration. However, 60% do not have plans (or only consider) implementing state-of-the-art Enterprise Resource Planning (ERP) solutions.

Half of the companies participating in the study claim that lack of time and resources represent the main challenges to the digital transformation of the tax function in their organization. Under these circumstances, one-third intend to outsource processes that are not essential to the company's tax strategy.

The Deloitte Central Europe Tax Technology Report was conducted in the first quarter of this year based on a survey involving 125 CFOs or individuals responsible for tax reporting from companies operating in 15 Central European countries, including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Poland, Romania, Serbia, Slovenia, and Slovakia.