How Tax Leaders Balance Compliance and Strategy

There’s a reason Vertex tracks the total number of new and updated sales and use tax jurisdictions that come online throughout the year: it helps quantify the complexity of indirect tax compliance. The pace of indirect tax change continues to accelerate. In 2025 alone, more than 12,000 sales and use tax jurisdiction updates came online, with rate changes approaching a decade high.

Those numbers also explain why the #1 source of tax risk in the next 12 months will be keeping up with changing regulatory requirements, according to the 2026 BDO Tax Strategist Survey report. Survey respondents include chief tax officers, senior tax leaders, tax directors, and CFOs at middle-market companies across industries and mainly based in the U.S.

Here are some other revealing numbers from the report:

• 93%: The portion of tax leaders reporting that global tax complexity has increased operating costs
• 92%: The portion of tax leaders reporting that global tax complexity has substantially increased in the past two years
• 59%: The share of tax leaders in global companies considering shifting business activities to other countries to reduce tax complexity

Where Tax Adds Strategic Value

Since I’ve previously highlighted the report’s takeaways on tax technology, I’ll focus on the tax group’s strategic contributions here:

• Tax’s role in strategic transactions is limited: While it’s encouraging to see that 99% of respondents indicate that the tax group has some form of involvement in mergers & acquisitions (M&A), divestitures, carveouts, restructuring, and initial public offerings (IPOs), the nature of that involvement appears less strategic than it should be. Tax groups are more frequently involved in transaction structuring, deal due diligence, and deal negotiation than they are in pre-deal strategy and modeling, valuation support, and post-close integration. As the report emphasizes, “tax’s involvement across the deal lifecycle is uneven, with the most consequential gap at the front end: Only 51% of tax teams report involvement in pre-deal strategy and modeling, an area where tax should play a key role.”
• Tax leaders are viewed as trusted advisors: More than nine in 10 tax leaders are invited to share their strategic insights before key decisions are finalized. What’s more, the demand for tax insights is increasing when senior leadership teams evaluate strategic transactions, organizational risk management, and business resilience strategies.
• Tax leaders’ involvement in other strategic discussions is declining: Conversely, the share of tax leaders who report high levels of involvement in the following strategic areas declined this year compared to the previous year: product or service development, workforce strategy, digital transformation and AI, supply chain management, and business resilience strategy. The most significant drop occurs in product and service development, where tax involvement declined by 23 percentage points. The less that tax leaders contribute to these strategic initiatives, the more likely that potential tax exposures are identified and addressed after efforts are under way (or even nearing completion), when changes are more expensive and time-consuming to make.

How to Win Friends and Influence Peers

The report’s analysis of tax leaders’ strategic involvement concludes with three recommendations:

• Rather than focusing only on relationships and collaborations, develop the “infrastructure for influence,” which involves “establishing stronger data flows, shared dashboards, and cross-functional processes that integrate tax insight into key decisions.”
• Identify high-potential managers and emerging leaders who can assist chief tax officers in extending tax insights into more business areas.
• Quantify the omission of tax considerations from strategic decision-making activities in dollars and cents to illustrate tax’s contributions to business value.