Next year is shaping up to be something of a pivotal year for global accounting and tax leaders. A trio of regulatory developments — including IFRS 18, mandatory e-invoicing and the OECD's Pillar 2 global minimum tax — will open the lid on a potential Pandora's Box of far-reaching and irreversible tax transparency. This will be the year when compliance becomes continuous, reporting moves to real-time, and governance evolves to handle unprecedented transparency.
Real-time data flows will replace static reporting, internal inconsistencies will be exposed to external scrutiny, and finance functions will need to move from a deliberative compliance stance to real-time data stewardship. How can tax leaders prepare to "open the lid" sufficiently to deliver the right levels of transparency and accountability, without unleashing a world of unmanaged data flows and compliance risk?
When the lid lifts: a turning point for tax
In Greek mythology, Pandora was given a sealed box by the gods and told never to open it. However, driven by curiosity, she lifted the lid and released chaos into the world. Disease, pain and hardship escaped, leaving just one thing behind: hope. The trio of major accounting and tax reforms coming next year are intended to deliver insight and accountability, but also carry the risk of disorder for those who are unprepared. The analogy is more than symbolic: 2026 reforms will expose gaps long hidden within local systems and manual processes.
For many global companies, accounting and tax data have long been compartmentalized, tracked in legacy systems, governed by local teams and reviewed retrospectively. This model is no longer sustainable.
From 2026 onward, IFRS 18 will introduce a restructured income statement format, while mandatory e-invoicing and e-reporting regimes will push tax data into real-time transmission. At the same time, the OECD's Pillar 2 global minimum tax rules will begin to take effect and require multinationals to calculate and disclose effective tax rates by jurisdiction.
These reforms will have a big impact on how global companies present their financial performance, manage their taxes and assess risk across their organizations. Once the flow of data to the outside world begins, it will be hard to stop.
IFRS 18: what's inside the box for finance?
As with Pandora's curiosity, IFRS 18 invites every company to open up its financial statements to deeper, wider scrutiny. Effective for periods beginning Jan. 1, 2027 — with early adoption allowed — IFRS 18 replaces IAS 1 and introduces mandatory performance categories, including operating, investing and financing, as well as enhanced note disclosure. It also requires companies to define and disclose their own management-defined performance measures, which need to be reconciled and explained in detail.
This new structure is designed to bring greater comparability to income statements, but may also reveal discrepancies in how companies currently report internally. In many cases, it may be that the performance metrics used for board reporting, investor presentations or executive compensation do not align with the new IFRS categories.
To prepare, finance leaders should assess the impact of IFRS 18 as early as possible. Charts of accounts will likely need to be updated, and group reporting templates and consolidation systems will likely need to be revised. Management-defined performance measures will require governance, testing and alignment with existing KPIs. For tax leaders, these changes matter because IFRS 18 categories influence tax-sensitive adjustments and must align with Pillar 2 data models and local digital-reporting structures.
Pillar 2: the global minimum tax
The Pillar 2 rules, part of the OECD's Base Erosion and Profit Shifting framework, take operational effect in 2026. These rules impose a 15% minimum effective tax rate on public or private multinational enterprises with consolidated annual revenues of €750 million or more (the same threshold as Country-by-Country Reporting).
To comply, groups must calculate their ETR in every jurisdiction where they operate. If the local rate falls below 15%, a "top-up tax" must be paid, often via an EU holding company under the Income Inclusion Rule.
The first Pillar 2 filings are due in 2026 and will demand unprecedented data quality and system integration. Tax functions will need to gather and reconcile data at a level of granularity that few systems currently support. Treasury teams will need to model the cash flow impact of these new liabilities. At the same time, finance functions will need to present a consistent narrative; one that links financial results under IFRS 18 with tax disclosures under Pillar 2.
Even companies headquartered in the USA — where domestic adoption of Pillar 2 remains uncertain — will be affected, as their overseas subsidiaries will face local compliance and top-up tax obligations.
E-invoicing and e-reporting: the data escapes
By 2026, more than 80 jurisdictions will require some form of real-time e-invoicing or e-reporting. For example, countries such as Brazil, France, Mexico and Poland are adopting Real-Time Clearance, where every invoice must be validated through government platforms before being shared with customers or booked for payment and becoming legally effective. Under digital reporting mandates such as SAF-T, SPED, MTD and SII, tax administrations now receive ledgers and transactional data directly.
These models transform tax compliance from a retrospective process into a real-time obligation. An American manufacturer operating in Poland, for example, must issue B2B invoices via the government's KSeF platform in a precise XML format. If validation fails, the invoice is legally invalid, which can delay payment, block VAT refunds and even disrupt supply chains.
Once such digital reporting begins, every transaction leaves a trace. Transparency, like Pandora's gift, can illuminate — or overwhelm — depending on readiness.
To keep pace, companies will need to localize their finance systems to meet national schema requirements, enable direct API integration with tax platforms, and automate reconciliations across tax, statutory and management reports. Real-time compliance is not just an IT challenge — it requires cross-functional coordination, robust data governance, and rapid incident response.
Forecasting the aftermath: a new tax cash flow discipline
Once the tax accounting box has been opened up, what escapes cannot be put back in. Every transaction is visible to tax authorities in real time, and timing becomes critical. Withholding tax obligations, VAT refunds and top-up taxes will affect liquidity in more immediate and measurable ways. Tax timing becomes a treasury-critical variable, not just a compliance consideration.
This means CFOs need to build tax-related cash flow models that integrate with treasury planning. These models should forecast the timing of indirect tax flows, quantify the effects of minimum tax adjustments and align with functional currency exposures. Stress testing should become standard — modeling scenarios such as delayed VAT refunds, API outages or jurisdictional disputes.
The changes also mean rethinking governance. According to TMF Group's latest Global Business Complexity Index, accounting and tax compliance remain among the top three global challenges. Companies need to build governance structures that channel complexity into foresight.
This will demand things like global dashboards for tax visibility, defined roles for local data owners, and joint steering committees that bring together tax, finance and IT. Technology must underpin the response, but culture, coordination and foresight will determine success.
Five actions for 2026 readiness
To prepare for the 2026 transparency revolution, tax leaders should focus on five practical priorities.
1. Impact assessment: First, they should conduct a thorough impact assessment of IFRS 18. This includes reviewing how the new presentation categories will reshape financial disclosures, updating charts of accounts to reflect these categories, and testing proposed MPMs to ensure they align with internal performance metrics and incentive structures.
2. Global compliance framework: Second, they should establish a global compliance framework for e-invoicing and e-reporting. This involves mapping jurisdictional mandates, cataloging schema requirements, and selecting the right technology to automate invoice clearance and data transmission. Companies should assign local data owners to be responsible for submission accuracy and timeliness.
3. Tax-integrated cash flow forecasting: Third, they should integrate tax forecasting into broader cashflow planning. This means building models that forecast VAT refund timing, withholding tax outflows and top-up tax liabilities under Pillar 2, and aligning them with treasury's currency and liquidity forecasts.
4. Finance system localization: Fourth, they should localize and integrate systems across jurisdictions. Finance systems must be configured to support IFRS 18 and digital reporting mandates. Where possible, API links should be built to avoid manual uploads and reduce the risk of human error. Automated reconciliations should bridge statutory, tax and management accounts.
5. Dual-lens governance and controls: Finally, they should strengthen governance with a dual-lens model. Companies should adopt separate calendars for group and statutory reporting, define clear data ownership and validation protocols, and establish a cross-functional compliance group to manage change. Teams across functions should be trained on both IFRS 18 and local digital-reporting requirements.
For today's tax leaders, embracing transparency and compliance will improve data quality, strengthen controls and bring greater clarity to performance narratives. What transpires in 2026 will challenge every finance function — but if handled early and carefully, it could also become a catalyst for strategic advantage.
