Meet Loctite, a company looking to change the way multinational tax teams work. There are still many departments that rely on outdated tools and processes to get work done. According to the 2020-founded startup, tax reporting is currently a fragmented and error-prone process that could benefit from software upgrades.
Loctax targets companies that do business in multiple countries. Its customers currently operate in 15 to 40 countries. These companies have in-house tax teams, each focused on one region or one tax. They communicate with the local finance team, which also works with external local tax advisors.
Now, these people have their own conversations in silos. It creates some information asymmetry within the company. It also makes it difficult to see the whole picture.
Another problem is that their Microsoft Excel spreadsheets or ERP systems don’t always keep up with new tax regulations. It can lead to errors and increase the risk of major incidents, such as hefty fines.
With Loctax, everyone in the company uses the same platform for their tax needs – it acts as an actionable tax control framework. Companies have developed different processes and workflows so that both internal teams and external consultants can switch to Loctax.
The platform becomes the single source of truth for all things tax related. Loctax’s customers include Wise, On Running, Essilor, Luxottica, Mohawk Industries and PedidosYa.
An added benefit is that tax executives can get real-time dashboards at any point in time with a good view of the company’s tax risks and liabilities – not just quarterly. It has also become easier to comply with the upcoming international minimum corporate tax that is being negotiated at the OECD level. In the EU, 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 and stakeholder expectations to show they are doing the right thing. Currently, there is no common ground between companies and regulators on how to talk about tax , and there is no direct way to reassure the tax team that they are meeting all their obligations,” Loctax co-founder and CEO Hans Kayaert said in a statement.
Loctax raised a $12 million Series A round led by Index Ventures. Existing investors Cavalry Ventures and Seedcamp are again participating in the Series A round. Some angel investors are also investing in the company, such as Revolut’s CFO and Checkout.com’s CEO.