How media companies should adjust to digital services taxes

Building geopolitical intelligence

Media companies have moved beyond treating tax policy as an external force beyond their control. Instead, they’re building sophisticated early warning systems that monitor geopolitical developments and model multiple scenarios for policy changes.

Organizations can establish cross-functional task forces to combine strategy, finance, government affairs and regional operations expertise. These teams analyze trade negotiations, political tensions, and economic pressures that could trigger sudden policy reversals like Canada’s DST abandonment.

“DST revenue is linked to GDP per capita of these countries. More than likely, the larger the middle and upper class, the more likely they are to have discretionary income that then allows them to get on these streaming platforms,” Shah said.

To counter future DST considerations, forward-thinking companies can join industry coalitions and engage with government stakeholders to influence transition periods and implementation details. This approach has proven valuable as DSTs become bargaining chips in broader trade disputes. Companies that model these political dynamics can adapt their market strategies and investment priorities before competitors recognize the shifting landscape. 

Redefining market opportunities

The conventional wisdom of prioritizing subscriber growth and market share is colliding with new realities. Markets that appear highly attractive based on audience size and growth potential can become break-even propositions once digital taxes and compliance costs are properly calculated.

Consider emerging markets with projected subscriber growth of 40% annually, seemingly irresistible opportunities for streaming services. However, when accounting for local digital services taxes, VAT expansions, content levies and withholding taxes on cross-border payments, the profit potential can drop precipitously.

Media companies can adopt “profit-aware expansion” methods that evaluate markets based on net economic value rather than gross metrics. These frameworks automatically incorporate prevailing DST rates, compliance costs and administrative burden into market attractiveness calculations.

“From a data standpoint, both planning and compliance data requirements are steadily increasing, forcing companies to get more granular in the source data they collect,” said Grant Thornton’s Lindsay Miller, a Managing Director in Corporate Tax Solutions. “That’s a fundamental theme of tax departments more broadly, that you’re seeing them shift to a data centric approach to be more agile as more and more reporting requirements take effect.”

This shift to agility requires cultural transformation within growth organizations. Teams must develop comfort with declining seemingly attractive opportunities when tax burdens undermine strategic goals. Success demands new evaluation frameworks and the organizational discipline to prioritize long-term profitability over short-term growth metrics.

Turning compliance into strategy

Digital tax management also works when media companies reposition tax compliance from a cost center to a strategic capability. These organizations build “trust infrastructure” that enables rapid market entry and stakeholder confidence.

Advanced practitioners invest in integrated compliance systems that unify data from finance, tax and operations to provide real-time visibility into obligations worldwide. These platforms build reputations for transparency that smooth regulatory relationships and accelerate approvals. When entering new markets, companies with robust compliance track records face lighter scrutiny and faster clearance processes than competitors still establishing credibility.

“It’s basically pushing the tax department to be more integrated with the operations of the company. I think it’s part of that evolution where tax is becoming more integral to organizations,” Shah said.

Compliance infrastructure can function as business intelligence infrastructure, providing insights into profitable market segments, optimal business model structures, and efficient resource allocation. What begins as regulatory necessity becomes analytical capability that informs smarter growth decisions.

Bridging critical skill gaps

The complexity of digital tax compliance is outpacing traditional organizational structures. Regulatory compliance requires technology integration, data analytics and automation capabilities that exceed the skillsets of conventional tax departments. IT teams that have this knowledge lack expertise in tax regulations.

This skills gap is forcing fundamental changes in talent strategy. Corporate tax departments are increasingly creating dual tax-technology positions, with 57% of recent tax technical hires coming from technology backgrounds rather than traditional tax roles. Organizations are discovering it’s often more effective to teach coding skills to tax professionals or tax rules to software engineers than to maintain separate siloed functions. These “hybrid” professionals build automated compliance systems, develop real-time reporting capabilities and create analytics platforms that turn regulatory data into strategic intelligence.  

“Companies are making the shift towards in-house tax technologists, either by developing the skillset or hiring from the outside. Many are focused on how to manage tax data most effectively, which is uniquely challenging since tax departments are typically receiving the data from elsewhere in the organization,” Miller said. “Companies that are already on that journey are going to be ahead. They're going to be able to absorb the DST filing impacts from a procedural standpoint easier and faster than companies who really haven't started down that pathway.”

For CHROs and talent leaders, this trend mean that organizations need to redefine job profiles, create cross-functional career paths, and invest in upskilling programs that develop these hybrid capabilities. Companies that successfully develop internal tax-tech expertise can implement compliance changes faster, adapt to new regulations more efficiently, and build more sophisticated analytical capabilities than competitors.

Managing compliance without burnout

Despite technological advances, the human dimension of digital tax transformation presents critical challenges. Tax and finance teams face exponential increases in compliance obligations, from DST filings to real-time digital reporting across multiple jurisdictions, often without proportional increases in staffing or support.

The human cost extends beyond individual wellbeing to organizational capability. When key compliance personnel exit due to unsustainable workload, companies lose institutional knowledge and face potential continuity risks during critical filing periods or regulatory changes. This brain drain occurs precisely when expertise is most valuable and difficult to replace.

“We see this in our client base all the time. Our clients are being asked to do more with less, and you’ve got less heads, you’ve got less budget in order to do the work that you're being asked to do,” Shah said.

Media companies that implement a “human buffer” strategy regard compliance as critical work deserving of strategic support. This approach adopts rotation programs that allow professionals from other finance areas to support tax teams during peak periods, strategic outsourcing partnerships for overflow work, and enhanced wellness initiatives specifically designed for compliance functions.

“Ultimately, the investment needed is not just putting more work on people, but investing in the technology to help the tax department get the data they need,” Shah added.

The push toward tax automation can itself be hampered by talent shortages, though. Companies need people to implement the technology that eases the burden, highlighting the continued centrality of human capital even in automated compliance solutions.

A seat at the table

Bringing digital tax compliance from a back-office concern to a strategic cornerstone can be a significant operational shift for a media and entertainment company.

“Tax departments must have a seat at the table when a business is looking at international expansion or streaming rights,” said Grant Thornton’s Michael Doggett, a Client Relationship Executive in Business Development and Sales.

Businesses that complete this evolution successfully demonstrate several common characteristics that point toward the new architecture of sustainable growth:

• Breaking silos for resilience: Businesses must foster cross-functional teams where diverse expertise combines to address multidisciplinary challenges.
• A new calculus of expansion: Organizations need analytical frameworks that balance user potential with regulatory costs, leading to strategic choices that prioritize sustainable profitability.
• Talent and trust as strategic cornerstones: Investment in compliance talent, including new hybrid roles that bridge traditional functional boundaries, creates operational capabilities that competitors cannot easily replicate.

DSTs for media companies have evolved from a footnote to a fundamental shaper of business architecture. Organizations that integrate this reality into their strategic planning, talent development, and operational design will find themselves better positioned not just to navigate regulatory complexity, but to transform it into lasting competitive advantage.