Meet Loctax, a company that wants to change how tax teams work in multinational companies. There are still many departments that rely on outdated tools and processes to get something done. According to this startup founded in 2020, tax reporting is currently a fragmented and error-prone process that could benefit from a software upgrade.
Loctax targets companies that operate across multiple countries and regions. Its customers currently have operations in 15 to 40 countries. These companies have in-house tax teams with each person specializing on a region or a type of tax. They communicate with local finance teams who also work with external local tax advisors.
Right now, those individuals have their own conversations in silos. It creates some information asymmetry within the company. It also makes it very difficult to see the whole picture.
The other issue is that their Microsoft Excel spreadsheets or ERP systems don’t always remain up to date with new tax regulation. It can lead to mistakes and increases the risk of critical incidents, such as hefty fines.
With Loctax, everybody in the company uses the same platform for their tax needs — it acts as an operational Tax Control Framework. Companies set out different processes and workflows so that both in-house teams and external consultants can switch to Loctax.
The platform becomes the single source of truth for all things related to taxes. Loctax customers include Wise, On Running, Essilor, Luxottica, Mohawk Industries and PedidosYa.
The added bonus is that Heads of Tax get real-time dashboards with a good understanding of the tax risks and responsibilities of the firm at any point in time — not just once per quarter. It also becomes much easier to comply with the upcoming international minimum corporate tax that is being negotiated at the OECD level. In the European Union, companies will also have to disclose country-by-country income tax information in the future.
“Companies are under more pressure than ever to meet growing tax reporting and regulatory requirements as well as the expectations of stakeholders to show they are doing the right thing. Currently there’s no shared concept in how companies and regulators talk about tax, and no straightforward way for tax teams to be confident that they’re meeting all their obligations,” Loctax co-founder and CEO Hans Kayaert said in a statement.
Loctax has raised a $12 million Series A funding round led by Index Ventures. Existing investors Cavalry Ventures and Seedcamp are participating once again in the Series A round. Some angel investors are also investing in the company, such as the CFO of Revolut and the CEO of Checkout.com.
Image Credits: Loctax