Today, European indirect tax (IDT) functions are increasingly using technology and regulatory mandates to shift from reactive compliance toward more coordinated governance. While almost half of organisations are building regional and global capabilities, mostly to better manage new e-invoicing and other government mandates, about 1-in-5 continue to manage these mandates locally, creating fragmentation and compliance risk.

More critically, the majority of European IDT functions are wielding significant influence over their organisations’ business decisions; however, that influence is not being properly measured, resulting in a sort of invisible contribution that is not being recognised nor funded. Indeed, many of these respondents who say their IDT functions makes a significant contribution to their organisation, are also more likely to be on teams that moved more proactively on a number of different fronts — from adopting AI to measuring return on investment (ROI) — and could provide a blueprint for how other IDT functions can achieve similar goals.

You can download the full copy of the European Indirect Tax Report here

To that end, we surveyed 230 IDT tax professionals from organisations the United Kingdom, Ireland, Germany, France, Belgium, the Netherlands, Luxembourg, Sweden, and Spain. (You can find a deeper breakdown of the demographics behind this survey in the Methodology section below.)

Interestingly, our look at the environment for IDT teams in Europe comes at a time when many are navigating the convergence of three powerful forces simultaneously: the accelerating rollout of e-invoicing and other government mandates across the continent; a rapid shift toward AI adoption; and persistent pressure to do more with limited teams and resources.

This report explores how teams are managing this triple-threat, what separates more proactive IDT teams from others, what it would take to close the gap, and how IDT team leaders can make sure they’re getting the recognition for the work they’re doing for the organisation.

• The mandate wave is here — 87% of European indirect tax functions are already working with, implementing, or formally planning for e-invoicing mandates, according to respondents. Compliance has shifted from preparation to execution; and those organisations not yet in active implementation may be running out of runway.
• Automation intent outpaces automation reality — 76% of respondents cite improved data quality and 64% say they’re experiencing better audit readiness from e-invoicing. However, only 10% have fully automated data reconciliation, despite almost half naming it their top automation priority.
• IDT teams have influence, but little recognition — Avoidance of regulatory penalties or business disruption is the most common way in which IDT teams directly impact the business; 62% report achieving this in the past 12 months., and more than half say they have significant influence over supply chain decisions and pricing. Yet, these benefits can be difficult to measure, and too few teams employ the kind of metrics that will quantify these factors.
• AI is present but mostly passive — While almost all of European indirect tax functions use at least one AI capability, fewer than one-quarter have deployed agentic workflow automation — the capability with the highest operational leverage.
• Governance and influence gaps limit strategic value — Tax owns compliance strategy but Finance controls technology purchasing in nearly one-third of European organisations. Only 51% engage the C-Suite monthly or more often, and 20% still treat each mandate as a local issue, causing them to accumulate fragmentation risk as mandates multiply.
• The hybrid professional is the future of the function — Respondents at IDT teams that feel under-equipped more often cite commercial skills gaps, such as in those involving supply chain, contract terms, and pricing. Across all markets, more than half of respondents identify combined tax and technology fluency as the target hiring profile, with upskilling and hybrid hiring ranking ahead of traditional specialist recruitment.