OECD Tax Policy Reforms 2026: Becoming more data-driven

VAT compliance has traditionally been something businesses dealt with after the transaction had happened. Sales are made, invoices are issued, the numbers are collected and reconciled, and eventually the VAT return is submitted.

That model is changing.

The OECD’s latest Tax Policy Reforms 2026 report highlights a growing shift towards more digital and data-driven tax systems, with governments increasingly introducing electronic invoicing, digital continuous transactional reporting and other technology-led measures to improve VAT collection and compliance. Covering tax reforms introduced or announced across 92 jurisdictions during 2025, the report offers a useful snapshot of where tax policy is heading and for VAT, the direction of travel is increasingly towards the transaction itself.

The OECDOrganisation for Economic Co-operation and Development. The OECD is an international organisation that promotes economic growth, social progress, and environmental sustainability through data, analysis, and policy advice. It has 38 member countries and focuses on topics like climate change, artificial intelligence, and gender equality highlights the growing adoption of digital continuous transactional reporting (DCTR), where businesses provide tax authorities with invoice or transaction data either in real time or close to the time of the transaction. The aim is to improve the availability and quality of information, helping tax administrations identify risks and address non-compliance more quickly.

The European Union’s VAT in the Digital Age (ViDAViDA or 'VAT in the Digital Age', is an EU initiative proposed by the European Commission that seeks to modernise and harmonise VAT processes for member states, by embracing new technologies. It is aimed at updating processes for the management of VAT, and reduce the VAT gap and fraud. The proposal also aims to address challenges in the area of VAT raised by the development of the platform economy.) reforms are a good example of where this is heading. And the EU is far from alone, in fact the report points to a global move towards digital VAT collection, including reforms covering e-commerce, online marketplaces and digital services.

More than 116 jurisdictions have implemented VAT reforms based on OECD standards for digital trade, while others are considering similar measures. Online platforms are also increasingly being brought into the VAT collection process, particularly for cross-border e-commerce.

Some of the developments go even further. Brazil’s major consumption tax reform, for example, is being built around an advanced electronic invoicing infrastructure and will introduce a split-payment mechanism, allowing the VAT element of certain transactions to be separated automatically through the payment process.

These examples may look different on the surface, but they point towards the same underlying change: VAT is moving closer to the transaction.

For businesses, that has important implications.

When VAT compliance happens primarily through a periodic return, there is more opportunity to identify and correct issues during the reconciliation process. As reporting moves closer to real time, there is less distance between the transaction and the tax authority receiving the relevant information.

That puts greater importance on getting the VAT treatment right at source.

Customer and supplier data needs to be accurate. VAT codes need to be correctly determined. Invoices need to contain the right information. Transaction data needs to flow consistently between ERPEnterprise resource planning (ERP) is a type of software that organisations use to manage main business processes., finance and tax systems. And businesses need confidence that the information being generated by those systems can support the reports being sent to tax authorities.

In this environment, data quality becomes an increasingly important part of VAT compliance.

It also means that businesses cannot necessarily look at e-invoicingElectronic invoicing - widely referred to as e-invoicing - is the exchange of a digital document between a supplier and a buyer. E-invoices are issued, transmitted and received in a structured data format that enabled automatic and electronic processing. They contain data in a machine-readable format so that an AP system can read an invoice without manual data entry, leading to faster and more efficient invoicing. or digital reporting as standalone technology projects. The technology may enable the reporting, but the underlying tax determination, master data, processes and controls are what ultimately determine whether the data being reported is correct.

For multinational organisations, there is another layer of complexity. While there is a clear global trend towards greater digitalisation, individual countries are taking different approaches. Reporting frequencies, technical requirements, invoice formats and data fields can all vary between jurisdictions. The OECD notes that this potential fragmentation can create additional complexity and costs for businesses operating across borders.

This makes the wider direction of travel particularly important. Businesses are preparing for a VAT environment where transaction data plays a much more central role in compliance.

The question is therefore becoming less about how often a business submits a VAT return and more about how confidently it can stand behind the data generated by every transaction.

The OECD’s report shows that this shift is already happening across multiple markets and through a range of different reforms. E-invoicing, digital reporting, platform-based VAT collection and automated payment mechanisms are all contributing to a tax environment that is more connected to the underlying transaction.

For businesses, there is still time to prepare for many of these changes. But the focus should extend beyond individual compliance deadlines. Understanding where VAT data originates, how it moves through the organisation and where potential gaps or inconsistencies exist will become increasingly important as tax authorities gain greater visibility of transactions.

This is where getting the fundamentals of your tax data right becomes critical. Accurate customer and supplier information, valid tax registration numbers and consistent entity data provide an important foundation for effective VAT compliance. Yet maintaining that data across multiple systems and jurisdictions can be a significant challenge, particularly for organisations managing thousands of entities.

That’s where LimeLyte® Entity Manager can help. Our tax master data management platform automates tax registration number validation, continuously monitors changes and identifies data discrepancies across customer and supplier records. It also maintains a complete audit history, giving tax teams greater visibility over their entity data and the evidence to support their compliance processes.

As VAT moves closer to the transaction, having confidence in the data behind those transactions will become increasingly important.