This chapter provides an overview of the content of the report.
Digitalisation and Digital Transformation in Tax Administrations
Regional Trends and Insights
Abstract
Over recent years, digital transformation has become a central pillar of tax administration. Increasingly, administrations are directing significant resources toward redesigning their processes to operate in a more digitally enabled environment. As economies and societies continue to digitalise, it is critical that tax administrations evolve in parallel. The rapid expansion of digital technologies and services has fundamentally altered how individuals and businesses interact and transact. In response, tax administrations are reconfiguring their operating models to better leverage these developments, including the expanding interconnections between systems and platforms that now underpin economic activity.
The Tax Administration 3.0 vision, as set out in the OECD’s 2020 flagship publication Tax Administration 3.0: The Digital Transformation of Tax Administration (OECD, 2020[1]), places the taxpayer at the centre of this transformation. It envisages a future in which taxation processes are increasingly seamless and impose minimal burden. A key enabler of this shift is the growing integration of the “natural systems” used by citizens, businesses and public authorities. As these systems become more interconnected, it becomes increasingly viable to embed tax processes directly within them. This creates new opportunities to lower burdens and simplify compliance by reducing the need for separate recording, reporting and calculation processes.
At the same time, technological innovation continues to accelerate, with artificial intelligence (AI) standing out as a particularly transformative development. Tax administrations are making expanded use of AI to strengthen performance across a wide range of functions, from enhancing taxpayer services to improving risk assessment and detecting non-compliance. While the potential benefits are significant, the deployment of AI also raises important considerations. Ensuring robust governance, maintaining data protection standards and safeguarding public trust will be essential as adoption progresses.
Ultimately, the success of digital transformation depends not only on technology but also on people. The workforce of tax administrations is undergoing a parallel transition, with increasing demand for skills in digital literacy, data analytics, emerging technologies and cybersecurity. Alongside technical expertise, capabilities in project delivery and organisational change are becoming ever more important to support the implementation of complex reforms. Building and sustaining this diverse skillset will be key to enabling tax administrations to fully realise the opportunities of digital transformation.
By analysing the data from the 108 economies that are included in the Inventory of Tax Technology Initiatives (OECD et al., 2025[2]), this report aims to illustrate the progress made by tax administrations globally in implementing digital solutions and digital transformation reforms. In addition to providing a global overview, the report adopts a regional perspective that helps illuminate how digitalisation and transformation trends are evolving across different regions. This perspective highlights both common patterns and regional differences and may assist administrations in identifying relevant approaches and innovations, including those emerging beyond their traditional peer groups and partner economies.
The analysis presented in this report is considered within the context of the six Tax Administration 3.0 building blocks as described in the 2020 vision and illustrated in Figure 1.1.:
Digital identity: As tax administrations increasingly deliver their services online, digital identity has become a foundational element of their operations. Secure and reliable digital identities are essential to enabling fully automated, machine-to-machine interactions. Chapter 2 explores the range of digital identity services provided by tax administrations, including their uptake and key features. It also reviews authentication methods and authorisation processes.
Taxpayer touchpoints: Interactions between taxpayers and tax administrations have expanded significantly, driven in part by the growth of online services and greater collaboration across government and with third parties. These interactions are facilitated through a variety of taxpayer touchpoints, which are examined in detail in Chapter 3.
Data management: Data plays a central role in the effective functioning of modern tax administrations, and digitalisation is enabling the collection and use of ever larger volumes of information. Chapter 4 outlines key considerations in data management, including data governance, evolving approaches to data collection, data sharing practices, and the increasing use of analytics.
Tax rules: Chapter 5 reviews recent developments and innovations in the management of tax rules. It presents information on areas such as assurance frameworks, automated registration and deregistration processes, and third-party withholding. The chapter also highlights the expanding role of AI, along with considerations for its responsible and effective deployment.
New skill sets: Digital transformation places significant demands on workforce capabilities. Attracting new talent and upskilling existing staff are therefore critical. Chapter 6 considers how tax administrations are identifying and mapping required skills, as well as fostering a culture that supports digital ways of working.
Governance: Chapter 7 examines the importance of governance frameworks in guiding digital transformation efforts, and how a clear and coherent digital transformation strategy can help administrations define objectives, set priorities and track progress over time.
Source: OECD (2020), Tax Administration 3.0: The Digital Transformation of Tax Administration, https://doi.org/10.1787/ca274cc5-en.
Finally, Digitalisation and Digital Transformation in Tax Administration: Regional Trends and Insights includes around fifty examples provided by tax administrations that help bring to life some of the information and illustrate the strategic direction of travel of tax administrations globally.
References
[1] OECD (2020), Tax Administration 3.0: The Digital Transformation of Tax Administration, OECD Publishing, Paris, https://doi.org/10.1787/ca274cc5-en.
[2] OECD et al. (2025), Inventory of Tax Technology Initiatives, https://www.oecd.org/content/oecd/en/data/datasets/inventory-of-tax-technology-initiatives.html (accessed on 15 June 2026).