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ERPEnterprise resource planning (ERP) is a type of software that organisations use to manage main business processes. migrations remain a major priority for organisations modernising their finance and operational systems. As these programmes continue into 2026, indirect tax is emerging as one of the most complex and risk exposed areas of change.
While new ERP platforms promise improved automation and control, the reality is that indirect tax requirements often challenge standard implementation approaches. Several recurring issues are already shaping how ERP migrations are being delivered.
Data quality
Indirect tax accuracy depends heavily on underlying data. During ERP migrations, legacy data is often moved across with limited revalidation, carrying historical errors into the new system.
In 2026, this is becoming increasingly problematic as tax authorities rely more heavily on transactional data for audit and digital reporting. Incomplete or inconsistently structured data can undermine tax determination, reporting and reconciliation from day one.
Processes and tax logic
ERP migrations frequently involve process redesign, but indirect tax is not always considered during these changes. New order to cash or procure to pay workflows may technically function, but fail to reflect how tax should be applied in practice.
This misalignment can lead to inconsistent tax outcomes across jurisdictions, particularly where multiple entities, supply chains or cross border transactions are involved.
Reliance on tax automation
Tax engines continue to play a central role in ERP migrations, yet automation is often assumed to be a solution rather than a component of a wider design.
In reality, tax engines depend on accurate inputs, well defined product taxability and correctly mapped jurisdictions. Without these foundations, automation can simply scale errors at speed, increasing exposure rather than reducing it.
Managing global and local requirements
As businesses operate across more jurisdictions, ERP migrations must support a growing range of indirect tax obligations, from VAT and GSTGoods and Services Tax to US sales and use tax.
In 2026, increasing digital reporting and e invoicing requirements are adding further complexity. ERP designs need to be flexible enough to accommodate both global standards and local regulatory nuances without constant reconfiguration.
Post go-live
One of the most significant challenges remains the assumption that tax issues can be addressed after go live. In practice, correcting indirect tax errors often requires changes to core configuration, integrations or master data, making remediation costly and disruptive.
As systems become more interconnected, these fixes can also have unintended downstream impacts on reporting and compliance.
Addressing challenges early can help reduce risk, avoid rework and support smoother ERP delivery, while overlooking them can quickly turn an ERP migration into a long term tax and compliance issue.
If you need support navigating indirect tax challenges as part of an ERP migration, whether you’re implementing a new system or delivering one on behalf of a client, our team can help, please get in touch.
