Tax Tech Market Surges to $36.72 Billion by 2030 - Led by Wolters Kluwer (Netherlands), H&R Block (US), Avalara (US), and Vertex.inc (US)

/EIN News/ -- Delray Beach, FL, April 10, 2025 (GLOBE NEWSWIRE) -- The global Tax Tech Market will grow from USD 18.53 billion in 2024 to USD 36.72 billion by 2030 at a compounded annual growth rate (CAGR) of 12.1% during the forecast period, according to new research report by MarketsandMarkets™. As companies digitize finance and accounting operations, they invest in tax technology to align with modern business models, especially in digital services and e-commerce.

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Tax Tech Market Dynamics:

Drivers

• Complex cross-border trade tax regulations
• State and local tax rate variability

Restraints

• Lack of awareness of tax tech in developing countries

Opportunities

• Integration with financial systems
• Rise of digital currencies & cryptotaxation

List of Key Companies in Tax Tech Market:

• Wolters Kluwer (Netherlands)
• H&R Block (US)
• Avalara (US)
• Vertex.inc (US)
• Thomson Reuters (Canada)
• SAP (Germany)
• ADP (US)
• Sovos (US)
• Intuit (US)
• Xero (New Zealand) … and more

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The tax tech industry is developing with the adoption of AI, automation, and cloud-based solutions in response to increased regulatory requirements and real-time compliance requirements. AI-powered platforms like Thomson Reuters ONESOURCE and Avalara are helping businesses automate tax processes, minimize errors, and stay current with evolving global tax codes. Regulatory changes also propel adoption, such as the EU's proposed "VAT in the Digital Age" (ViDA) that mandates e-invoicing and real-time reporting by 2028 and the IRS's digital transformation initiatives under the Inflation Reduction Act. These are revolutionizing tax technology from a back-office operation to a strategic asset for sustaining transparency, reducing risk, and enabling smooth cross-border activities.

Based on region, the North America is region is expected to hold largest market share during forecast period

North America is expected to hold the largest market share in the tax technology sector during the forecast period, due to robust regulations, high digital adoption, and government initiatives for promoting e-filing and automation. United States and Canada are the prominent contributors towards growth, of which the U.S. takes a lead due to its complex system of taxation, high frequency of tax filing, and mounting implementation of AI-enabled tax compliance platforms. The Internal Revenue Service (IRS) has been instrumental in simplifying tax filing through initiatives such as IRS Free File and IRS Direct File. IRS Free File is a collaboration between the government and private industry, providing free assisted tax preparation software to taxpayers with an Adjusted Gross Income (AGI) of $84,000 or less. IRS Direct File, by contrast, is a completely government-operated system that allows individuals to file directly with the IRS without the need for third-party services. All these efforts combined with the increased use of cloud-based tax products are making e-filing more convenient and used on a large scale throughout the region.

In the United States, taxpayers and businesses struggle with frequent changes in tax laws and cumbersome multi-state tax compliance, the need for which will propel automated tax reporting, AI audits, and blockchain-secured security solutions. The tax climate in the U.S. also faces one of the highest taxpaying citizen participation rates, as American citizens will spend an average of 13 hours and $240 annually on tax preparation. Adoption of AI-based tax filing platforms and automated compliance solutions minimizes errors and makes the filing more efficient for businesses and individual taxpayers. The rapid growth of the gig economy, e-commerce, and cross-border business has also driven demand for real-time tracking of taxes, digital invoicing, and automation of sales tax, which in turn has established the U.S. as the biggest market for tax tech solutions.

Canada is also experiencing a surge in digital tax technology adoption, particularly due to its progressive tax policies and government-driven digital transformation initiatives. The Canada Revenue Agency (CRA) is moving in the direction of increased online filing for taxes and automating compliance verification, thereby nudging businesses and individuals towards adopting cloud-based tax software. Besides, the Canadian government's efforts to implement remittance in real-time and online tax audits have motivated businesses to implement AI-based tax compliance software to be accurate and avoid penalties. The growth of SMEs in Canada is also instrumental since they are looking for affordable tax systems that fit into their financial management solutions.

Overall, North America's leadership in the tax technology market is owed to its extremely digitalized tax infrastructure, government-supported e-filing initiatives, and high demand for AI-led automation. With more stringent regulatory needs and businesses seeking tax compliance efficiency, the region is poised to remain at the leadership position, offering state-of-the-art cloud-based, AI-driven, and blockchain-based tax solutions. By ongoing investments in digital tax innovation and security enhancements, North America will drive the future of tax technology in making taxpayers and businesses precise, compliant, and effective.

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Based on solutions, the tax workflow and document management segment is expected to grow at highest CAGR during the forecast period.

The tax workflow and document management segment is expected to grow at the highest rate in the tax technology solutions market during the forecast period due to increasing regulatory complexities, the need for real-time compliance, and the rising adoption of cloud-based solutions. Organizations are automating tax processes through AI, eliminating manual errors, and enhancing efficiency in document processing, audit trails, and compliance monitoring. The requirement for document management solutions is also fueled by the movement towards e-invoicing mandates and digital tax reporting in many nations. Businesses also use tax workflow solutions to centralize data, improve collaboration, and provide audit readiness. Cloud-based solutions allow ERP and tax software integration, enhancing scalability and accessibility. As regulatory authorities are implementing strict tax laws, companies are giving top priority to automated workflow solutions for improving accuracy, transparency, and efficiency, thus driving high growth in this segment.

Based on professional services, the support and maintenance segment is expected to hold largest market share during the forecast period.

In the tax technology market, the support and maintenance segment holds the largest market share within professional services during the forecast period due to the critical need for continuous system updates, compliance with evolving tax regulations, and real-time issue resolution. As tax legislation becomes more complicated and subject to regular changes between jurisdictions, businesses depend on assistance to help their tax solutions be accurate and current. Support services are critical in keeping downtime as low as possible, improving system performance, and incorporating new features compatible with regulatory updates. Additionally, the growing adoption of cloud-based tax solutions has fueled the demands for round-the-clock support in addressing configurations, security, and integration problems. Companies also need professional skills to provide error-free and seamless working and reduce the risks of tax filing mistakes or non-compliance, making support and maintenance a critical component of professional services in the tax technology arena.

The global tax technology (tax tech) market is witnessing substantial growth opportunities due to digital transformation, intricate regulatory requirements, and real-time compliance needs. Governments worldwide are embracing digital tax regimes, including e-invoicing and real-time reporting, compelling businesses to implement AI-driven, cloud-based tax solutions to enhance accuracy and reduce risk. Asia-Pacific, Latin America, and Africa emerging markets provide immense potential with expedited digitalization. In contrast, multinational corporations seek scalable platforms for cross-border compliance following international standards like BEPS and Pillar Two. Additionally, the combination of tax technology with ERP and financial analytics offerings facilitates better, enterprise-grade tax management, which is now a key solution for enterprises that need agility, transparency, and compliance in the increasingly complex tax environment.

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