With 1 in 3 companies perceived by authorities as being non-transparent about their tax reporting, the weaknesses of multinational corporations’ tax functions are increasingly exposed. Consequently, there is a growing need for companies to meet ESG expectations of investors, deal with rapidly changing regulations, and maintain their reputation.
Seeking to provide a solution for corporates straddling multiple tax jurisdictions and buckling under the multitude of legal and financial demands with greater ease and clarity, Belgian collaborative tax governance platform Loctax has raised $12 million.
The company will use the new funding to expand in the U.K. and Europe. It will also increase its partnerships with the tax and professional advisory sector.
Index Ventures led the Series A raise. The all-cash funding also saw participation from existing backers, including Cavalry Ventures, and impact investors Mustard Seed Maze and Seedcamp and angel investors such as the CFO of Revolut and the CEO of Checkout.com, as well as Showpad founders Pieterjan Bouten and Louis Jonckheere.
The tax management platform had brought in $3.6 million in a seed round last year.
Founded in 2020 by a team from Belgium and Lithuania, and headquartered in London, Loctax aims to give companies the technical ability to evaluate and respond to a fast-changing global tax landscape. The platform combines up-to-date company data, international tax rules, visual intelligence, and collaboration tools to help companies achieve total control of their tax governance.
Locta’s CEO Hans Kayaert said: “Companies are under more pressure than ever to meet the 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.”
Hannah Seal, partner at Index Ventures, added: “Tax teams, particularly those at companies operating in more than one jurisdiction, are coming under more and more pressure, both from increasing regulation in this area, and heightened expectations from stakeholders around tax reporting and transparency. Loctax is giving tax teams a single source of truth and allowing them to ensure compliance in all locations while improving the team's workflow.”