Thomson Reuters launches AI tax tool for EU VAT reform

Thomson Reuters has launched ONESOURCE Indirect Compliance powered by CoCounsel and published research on business readiness for the European Union's VAT in the Digital Age reforms.

The new tax compliance product is aimed at multinational finance and tax teams managing indirect tax filings across multiple jurisdictions. It supports VAT and indirect tax compliance in more than 60 countries and can import data from financial systems, transactional records and, where available, draft submissions from tax authorities.

The launch comes as businesses prepare for a broad overhaul of VAT reporting in the European Union. ViDA introduces mandatory e-invoicing, digital reporting requirements and cross-border data exchange, changing how VAT information is reported, shared and checked across the bloc's 27 member states.

Although the full EU framework will not need to operate at scale until 2030, several countries are already introducing national mandates. That has created a patchwork of local requirements for companies with cross-border operations, particularly groups trying to standardise tax processes across Europe.

Research published by the Thomson Reuters Institute points to a gap between awareness of the reforms and operational readiness. The survey covered tax and finance professionals at organisations with revenue of at least €100 million in Germany, France, Spain, the Netherlands, Sweden, Belgium and the UK.

According to the findings, 86% of respondents reported being familiar with ViDA, but only 35% had a detailed understanding of the requirements. Just 22% said their businesses had formal transition programmes in place.

The report also found that 54% of respondents lacked sufficient staff time and financial resources to implement compliance fully. The same proportion said their main concern was invoices being rejected or not paid by customers, ahead of financial penalties at 44%.

Business disruption and reputational damage with partners both ranked above fines among concerns linked to the reforms. The research found that organisations often begin with confidence before encountering the practical challenges of planning, systems changes, and process redesign.

UK lag

UK businesses were described in the research as less prepared than their counterparts in EU countries on several measures. Respondents in the UK reported lower readiness in areas including team knowledge and training, real-time extraction of invoice data and reporting to tax authorities, and systems for issuing, exchanging, receiving and validating e-invoices in real time.

That matters because UK groups with EU operations still need to meet European requirements, while the UK is also moving towards its own domestic e-invoicing mandate. For companies operating on both sides of the Channel, that raises the prospect of parallel compliance projects and additional pressure on tax teams.

Thomson Reuters is positioning the new ONESOURCE product as a way to reduce manual work at period end. Current indirect tax compliance often requires weeks of effort to gather data, resolve exceptions and reconcile figures across systems before filing deadlines.

The software uses CoCounsel, the group's AI technology, within the indirect tax workflow. It is designed to identify issues before deadlines and help create a review-ready compliance process with an auditable trail.

The system is also built to make its outputs transparent and verifiable in tax environments where filings must be defended. That reflects a broader concern in regulated functions that automation must not only save time but also produce records that can withstand scrutiny.

Global tax reporting is still in its early stages in many jurisdictions, but governments are moving towards tighter digital oversight. Countries including Brazil, Poland and France are being watched closely by companies and advisers because they have moved faster on digital reporting and e-invoicing rules.

For large groups, the challenge is no longer limited to understanding a single reform package. It increasingly involves building tax processes that can cope with a growing number of national mandates, changing reporting formats and more direct interaction between company systems and tax authorities.

A customer example highlighted the appeal for multinational users managing tax change across many territories.

"Getting new countries on board could take weeks, sometimes months. Having ONESOURCE Indirect Compliance powered by CoCounsel will help us identify changes to mappings, guide us through configuration and streamline the whole process. These changes will genuinely be transformative for a global operation like ours," said Kevin Escott, Executive Director, Corporate Functions Technology, JLL.