ALTERNATIVE WAYS TO MANAGE COOPERATION IN TAX RELATIONS: CHALLENGES OF DIGITALIZATION AND TAX COMPLIANCE

Abstract

The recent advancements in tax administration have witnessed a significant shift from traditional paper-based reporting to comprehensive digitalization of tax filing and analysis processes. The integration of information and communication technologies into tax relations, alongside the enhancement of tax systems through digital tools—such as electronic registration of tax invoices, electronic reporting, and electronic verification—has streamlined processes and improved tax compliance. However, it remains essential to investigate whether merely transitioning to electronic reporting suffices and to explore alternative management methods for interactions between businesses and regulatory authorities. This article aims to substantiate the patterns of change in tax relations due to the evolution of information technologies and to evaluate alternative options for ensuring the accuracy of tax reporting metrics, which could enhance tax compliance levels. Tax management, a subset of overall management, allows for the assessment and analysis of the impact of the tax environment on business operations amidst uncertainty. The challenges posed by the evolving tax landscape, including legislative volatility and subjective interpretations by regulatory bodies, necessitate a reevaluation of tax management practices. Furthermore, the increasing volume of data enables tax administrations to focus limited resources on addressing serious tax violations. This dynamic calls for a shift towards automation and digitization of accounting practices, paving the way for electronic audits. Despite the progress in electronic administration, the core criterion for tax compliance remains the submission of accurate tax reports and the fulfillment of tax obligations. The article discusses the OECD's recommendations for developing alternative cooperation frameworks between tax authorities and businesses, emphasizing the need for transparency and predictability in tax relations. In conclusion, successful transformation of tax relations between businesses and the state requires more than just electronic reporting; it necessitates a unified source of information for assessing tax risks and ensuring compliance. Ukraine is encouraged to adopt advanced practices for identifying tax risks and facilitating electronic tax audits, thereby enhancing the overall efficacy of tax administration