Turning tax insights into strategic business value

As businesses become increasingly digital, the role of tax is also undergoing significant change.
Tax has traditionally been viewed primarily through the lens of compliance, ensuring that returns are submitted, obligations are met, and the correct amount of tax is paid. While these responsibilities remain fundamental, businesses are increasingly recognising the wider role tax information and tax advisers can play in supporting commercial decisions and future planning.
As regulatory requirements and tax administration become increasingly digital, tax teams have an opportunity to spend less time on manual processes and more time helping organisations understand the implications of their decisions.

A step beyond compliance

Income Tax and VAT compliance has traditionally focused on meeting filing deadlines and ensuring that local and international obligations are fulfilled correctly and on time.

Malta has been moving towards greater digitalisation of tax administration for more than two decades. The introduction of structured financial information for company tax returns and the continued development of electronic filing have gradually changed how tax information is prepared and submitted. VAT reporting has similarly become increasingly digital through the Malta Tax and Customs Administration’s online services.

These developments can reduce some of the administrative effort associated with preparing and submitting information, allowing businesses and tax practitioners to devote greater attention to analysis and more complex matters.

As filing processes become more digital, the information generated through tax and VAT compliance can also provide businesses with useful insight into their tax position.

Tax and VAT returns remain compliance obligations, but the information behind them can provide a foundation for identifying risks, understanding trends and considering opportunities for greater tax efficiency where appropriate.

Tax teams can therefore support organisations not only in meeting their obligations but also in understanding how tax considerations may affect wider business decisions.

Tax as a strategic adviser

VAT professionals are increasingly becoming involved earlier in organisations’ decision-making processes.
Where support may once have been sought primarily around filing deadlines and specific compliance requirements, businesses increasingly seek tax advice when considering matters such as:

• Business restructurings
• International growth and overseas expansion
• Optimisation of supply chains
• Technology and digital business models
• Transactions and investment decisions

Each of these areas can have significant tax implications. Considering those implications at an early stage allows organisations to understand potential risks, obligations and opportunities before commercial decisions are finalised.

At the same time, increasingly detailed reporting requirements mean that accurate and reliable information remains essential. VAT professionals can help interpret this information and translate technical tax considerations into practical implications for the business.

This reflects the closer relationship developing between compliance and advisory work.

Compliance produces and validates important information about an organisation’s activities and tax position.Used effectively, that information can help inform discussions about future decisions rather than simply documenting what has already happened.

ViDA as an accelerator for change

The EU’s VAT in the Digital Age (ViDA) package is one example of how tax administration is becoming increasingly digital.

ViDA is being introduced progressively across the European Union. From 1 July 2030, cross-border B2B transactions within scope will become subject to new Digital Reporting Requirements based on mandatory e-invoicing.

The objective is to modernise VAT reporting, support more efficient administration and strengthen the ability of tax authorities to address fraud and non-compliance.

For businesses, increased digitalisation can also reduce reliance on manual processes and improve the quality and timeliness of VAT information, provided that the underlying systems and data are appropriately managed.
This has implications beyond compliance.

As reporting becomes more automated and information becomes available more quickly, finance and tax teams may be able to spend less time preparing data and more time analysing what it means.

Better access to timely VAT information can support more informed discussions around cash flow, transactions, business models and tax efficiency.

Organisations should therefore consider ViDA not simply as a future reporting requirement, but as another reason to assess whether their tax processes, data and systems are prepared for an increasingly digital environment.

The tax professional as tomorrow’s trusted adviser

Technical tax knowledge remains essential, but on its own it is increasingly insufficient.

Tax professionals also need a strong understanding of how their clients operate, including their business models, customers, suppliers and competitive environment. Data analysis, technology and communication skills are becoming increasingly important alongside traditional technical expertise.

Bringing these capabilities together allows tax professionals to combine compliance knowledge with commercial understanding and strategic thinking.

As developments such as ViDA reshape tax administration, the role of the adviser will increasingly involve helping businesses interpret change, identify potential improvements and implement practical responses.

The shift from compliance towards a broader advisory role is not a departure from the traditional role of tax. Rather, it is a natural extension of it, using the information and expertise developed through compliance to help businesses make better-informed decisions.

RSM Malta’s Direct and Indirect Tax teams support organisations in meeting their tax obligations while considering the wider implications of regulatory change, digitalisation and strategic business decisions.

To discuss how your organisation can prepare for upcoming tax developments and make better use of tax information in business planning, contact RSM Malta’s Direct and Indirect Tax teams.

Article written by Michela Scicluna - Manager, Tax and Martha Sammut - Senior, Tax