Sovos Expands Sovi AI to Revolutionize Product Tax Code Classification and Data Mapping in Global Tax Compliance
In an era when organizations face increasingly complex and rapidly changing tax environments, automation and intelligence have become indispensable to maintaining compliance. Recognizing this growing demand, Sovos, the “always-on compliance company,” has announced a major expansion of its Sovi™ AI Tax Compliance Cloud platform. The latest release introduces groundbreaking capabilities in product tax code classification for Sales and Use Tax (SUT) and data mapping for VAT filing, promising to redefine how businesses approach tax automation.
With these new enhancements, Sovos is delivering a smarter, more adaptive, and highly efficient tax compliance ecosystem — one that minimizes manual effort, reduces human error, and accelerates operational agility for enterprises operating across multiple jurisdictions.
A New Milestone in the Evolution of Sovi AI
Since its launch, Sovi AI has represented Sovos’s commitment to embedding artificial intelligence into the very fabric of compliance management. The platform combines tax domain expertise with machine learning (ML) capabilities, enabling global organizations to automate tasks that were once time-consuming and error-prone.
With this expansion, Sovos has pushed the boundaries of what AI can achieve in the compliance space. The new product tax code classification and automated data mapping functions integrate machine learning models capable of analyzing product attributes, data structures, and regulatory frameworks. These models then generate recommendations for correct tax treatments with high accuracy, empowering companies to make faster and more reliable compliance decisions.
“By using machine learning to analyze source data formats and product attributes to recommend the correct tax treatment, Sovi AI automates some of the most manual and error-prone processes in tax compliance,” Sovos stated in its announcement. “This helps global organizations improve accuracy and accelerate time to value.”
The Challenge of Manual Tax Classification
In global commerce, determining the correct tax treatment for products and services is both essential and extraordinarily complex. Each transaction must reflect the right product tax code — a foundational element that determines how much sales tax or VAT applies in a given region. These classifications influence not only the amount of tax collected but also how transactions are reported to regulators.
Historically, maintaining accurate product tax codes has required labor-intensive, manual review processes. Teams often spend weeks or months sifting through product catalogs, cross-referencing thousands of SKUs against evolving tax codes, and ensuring alignment with jurisdictional rules. The complexity is magnified for businesses that operate across multiple countries, where sales and use tax, value-added tax, and other indirect taxes vary dramatically.
Even after initial classification, product data must be continually updated to account for regulatory changes, new product launches, or catalog expansions. Each of these adjustments adds another layer of manual work and risk — a challenge Sovi AI is now engineered to solve.
Automating Data Mapping for VAT Filing
Another significant pain point in tax compliance lies in data mapping, particularly during VAT filing onboardings. Traditionally, mapping source data to the required compliance-ready format involves repetitive cycles of file reviews, field corrections, and reconfigurations whenever regulations evolve or data structures shift. These processes not only consume valuable time and resources but also create bottlenecks that slow down VAT reporting and reconciliation.
The new Sovi AI capabilities automate this entire process. By leveraging ML-based pattern recognition, the platform learns from existing data relationships and automatically maps source data to the appropriate compliance schema. Whenever a data structure changes or a regulator mandates new reporting fields, users can update mappings through AI recommendations rather than waiting for manual adjustments.
This automation ensures that compliance operations remain resilient and responsive, even as regulatory landscapes evolve. As a result, organizations can reduce onboarding time for VAT services, improve data accuracy, and maintain continuous readiness for audits and filings.
A Strategic Vision for AI-Driven Compliance
According to Kevin Akeroyd, CEO of Sovos, the expansion of Sovi AI represents more than just a product update — it embodies a strategic rethinking of compliance as a scalable and intelligent business function.
“With the launch of Sovi AI, we set out to reexamine how compliance is managed inside an organization – identify the inefficiencies, eliminate the redundancies and create scalable processes across the business,” said Akeroyd. “The latest release of Sovi delivers on this goal by replacing manual and mundane tasks with tax compliance intelligence that learns, adapts, and is flexible to the needs of the individual customer.”
This statement underscores Sovos’s belief that compliance should evolve from being a reactive obligation to becoming a proactive, data-driven function that supports business growth. Through Sovi AI, Sovos aims to empower tax and finance teams with tools that enhance decision-making while maintaining full regulatory alignment.
How Sovi AI Powers Efficiency Across the Sovos Ecosystem
The enhanced Sovi AI capabilities integrate seamlessly into the Sovos Tax Compliance Cloud, supporting key product lines such as Global Tax Determination (GTD) and VAT Filing Services. Together, these functions form the backbone of Sovos’s global compliance infrastructure, enabling enterprises to manage indirect tax requirements across jurisdictions with greater precision and speed.
1. Global Tax Determination (GTD): Smarter Product Classification
For businesses managing vast product catalogs across ERP and e-commerce systems, the new AI-driven classification capability is a game changer. Sovi AI can now analyze product attributes directly from core systems like SAP, Oracle, and NetSuite to recommend the correct tax codes.
The platform generates confidence scores for each recommendation, enabling compliance teams to prioritize review efforts. High-confidence classifications can be processed automatically, while the system flags edge cases for human validation. This hybrid model not only saves time but also enhances auditability and consistency.
Whether onboarding thousands of new products or adapting to sudden regulatory updates, organizations can now eliminate the manual mapping that often stalls compliance operations. In doing so, Sovi AI transforms what was once a cumbersome back-office task into a streamlined, intelligent workflow.
2. VAT Filing Services: Streamlined Onboarding and Adaptability
For VAT filing, Sovi AI accelerates onboarding by automatically mapping source data to compliance-ready formats. Instead of relying on traditional back-and-forth communications between teams, businesses can now trust AI-driven automation to configure mappings instantly.
Moreover, when data structures evolve or regulations introduce new reporting requirements, users can simply apply updates through the AI engine rather than waiting for manual reconfiguration. This agility ensures continuous compliance while minimizing disruptions to operational workflows.
Driving Intelligence and Flexibility in Compliance
For Sovos, the integration of AI into compliance workflows is not merely a technological upgrade — it’s a paradigm shift in how businesses perceive tax automation. The company’s Chief Product Officer, Swati Garodia, emphasized this point in her remarks:
“Through these new capabilities, Sovi continues to deliver on our promise of making compliance a smarter and more automated business function,” said Garodia. “By embedding Sovi AI into core workflows, we are reducing the business’ dependency on manual resources, increasing accuracy, and helping customers stay one step ahead of evolving tax rules.”
Garodia’s statement reflects Sovos’s long-term vision: a world where compliance operations are not just reactive to change but predictive and adaptive. With machine learning continuously refining its understanding of data structures and tax treatments, Sovi AI becomes increasingly capable of handling complex, cross-border compliance requirements with minimal human intervention.
The Business Impact: Accuracy, Speed, and Scalability
The expansion of Sovi AI offers measurable benefits across several key dimensions of compliance operations:
- Accuracy: By analyzing massive volumes of product and transactional data, Sovi AI reduces classification errors that could otherwise lead to costly tax miscalculations or compliance penalties.
- Speed: Automated mapping and classification drastically cut down on time spent onboarding new systems, integrating data, or adjusting to new regulations.
- Scalability: As organizations grow, Sovi AI scales effortlessly across multiple markets, tax jurisdictions, and product categories without increasing the burden on internal teams.
- Adaptability: Machine learning models evolve with each new dataset, continuously improving performance and ensuring alignment with emerging regulatory standards.
- Cost Efficiency: By minimizing manual labor and repetitive data management, companies can redeploy resources toward higher-value strategic initiatives.
Ultimately, these advantages translate into a more resilient and future-ready compliance posture — one capable of keeping pace with global digital transformation and shifting tax regimes.
Available for Early Adopters
Sovos announced that the new product tax code classification and data mapping features will be available to early adopters by invitation starting December 2025. This phased rollout will allow Sovos to work closely with enterprise customers, refining the solution through real-world feedback and performance data before broader availability.
By taking this measured approach, Sovos ensures that Sovi AI not only meets but exceeds the expectations of complex, multinational organizations that depend on precision and reliability in their tax systems.
Setting a New Standard for Compliance Technology
Sovos’s ongoing investment in artificial intelligence signals a broader shift within the compliance technology sector. As governments around the world adopt real-time tax reporting, e-invoicing mandates, and digital audit requirements, businesses must evolve from manual compliance frameworks to intelligent automation ecosystems.
Sovi AI represents Sovos’s answer to that challenge — a platform designed to anticipate change, learn from data, and execute compliance tasks with unprecedented efficiency. By embedding AI deeply within core workflows, Sovos positions itself not just as a compliance provider, but as a strategic partner helping businesses thrive in a digital-first economy.
As industries continue to digitalize and regulatory complexity intensifies, solutions like Sovi AI will define the next era of compliance — one that is automated, adaptive, and always on.
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