KING OF PRUSSIA, PA — Vertex Inc. (NASDAQ: VERX) released research arguing that increasingly complex global indirect tax rules are turning tax compliance into a real-time operational and governance issue, with many large enterprises reporting growing audit burdens, integration challenges and lost revenue tied to compliance uncertainty.
The report, based on surveys of more than 2,100 enterprise leaders conducted by two independent research firms, concludes that evolving invoice-level tax requirements and fragmented compliance systems are forcing companies to treat indirect tax as a strategic business function rather than a traditional back-office process, according to Vertex.
The company reported that 58% of surveyed enterprises face highly complex indirect tax audits, while 45% identified keeping pace with changing tax regulations as a leading compliance challenge. Eighty percent indicated that achieving audit readiness requires significant manual effort.
Technology integration remains another pressure point. According to the research, 56% of respondents cited integrating tax systems with existing enterprise platforms as their most common compliance challenge, while only 12% reported full end-to-end integration across tax, finance and information technology systems.
Vertex contends that those operational and regulatory pressures create what it calls a “Compliance Confidence Gap,” in which businesses take more conservative tax positions because they lack confidence they can defend those decisions during an audit.
One-third of U.S. enterprises surveyed estimated they forgo more than $1 million annually through overly cautious tax treatment, missed exemptions or unrecovered indirect taxes.
“Our research shows that enterprises are struggling to keep pace with escalating regulatory requirements and are seeking a coordinating discipline to manage complexity,” Tammy Kaneshige, partner and chief executive officer at Emerald Research Group, stated.
Vertex proposed a framework it calls “Decision-to-Defense,” built around determining tax obligations, documenting decisions, preparing for audits and continuously improving compliance controls.
The company described the findings as reflecting a broader shift in enterprise compliance as governments adopt more detailed and frequently changing digital tax-reporting requirements.
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