Compliance: from time-consuming to value-adding

The reporting landscape is changing faster than ever before and organisations often see staying compliant as a major challenge. Do digital tools sufficiently address this changing reporting landscape and increasing demands? Or do you, as a tax or compliance professional, need an approach that combines human expertise with data and smart technology? PwC experts Tjeerd van den Berg and Stan Berings believe it’s time for a new approach, in which a fully integrated and automated process is central.

The problem: the growing compliance burden

Reporting requirements in the tax world are increasingly perceived as a burden. In our view, the following factors have contributed to the rapid increase in this burden:

• Constant change
  • We live in a time of constant change when it comes to reporting requirements. From reforms such as OECD's Pillar Two - with the minimum corporate tax rate entailing highly complex data collection and reporting requirements - to new sustainability reporting such as the Corporate Sustainability Reporting Directive (CSRD). 
• Higher expectations
  • Governments and tax authorities today simply demand more than before. For instance, they expect companies to report faster and more often - sometimes even in real time. Inaccuracies or incompleteness are also less and less tolerated.
• Limited budgets
  • While the pressure on compliance is increasing, budgets to move with it are actually limited. In many organisations, there are too few employees and too little time available to carry out all this extra work.
• International differences
  • For internationally operating companies, the number of cross-border reporting obligations is also growing. This calls for additional capacity to develop an understanding of both the similarities and differences in this cross-border legislation.

Clearly, the compliance burden continues to grow. It involves not only new rules and regulations, but also new standards on data quality and new expectations for global consistency. Something has to change for tax and compliance professionals to live up to it all.

Just investing in digitisation and tools is not enough

To meet reporting requirements, many companies have invested heavily in new technology and tools in recent years. One example is the financial modules in newer ERP systems, which automate parts of the tax and reporting process. The fact remains that an overarching, turnkey technology solution for all tax and compliance issues facing a large international company simply does not exist. Ultimately, technology is just a tool. Because while technology is the driving force behind many of the changes in compliance, any tool has to be driven by people. 

The reality is that any compliance solution needs to be customised to some extent. A company may be highly centralised with, for example, a central finance function and only one ERP system. Other companies are more decentralised, with many systems, teams and processes.

Simpler, faster and smarter with Connected Tax Compliance

So we say it is time for something new, for a new vision of compliance. We believe tax and compliance professionals need a comprehensive, data-driven approach to compliance and reporting with better insight into upcoming regulatory changes. A fully integrated and automated process for your compliance obligations worldwide, giving you time to add value to your organisation and the tax function. 

We call this Connected Tax Compliance: a global approach in which we connect data, teams and insights by using the expertise of our specialists as an extension of your team, combined with smart technology. For example, the Sightline platform gives you greater insight into all the reporting requirements that apply to your business. And by better connecting the different jurisdictions in which you operate, you can share data - for example on direct or indirect taxes, transfer pricing or environmental taxes - more easily. A new compliance approach that simplifies not only your current, but also future tax, statutory and legal reporting obligations.

Video: managing the increasing complexity of compliance and regulatory burden

Recently we have commissioned a survey, asking a number of organisations about the future of the tax function. In the video below, PwC experts Sabine Barlage and Stan Berings discuss some remarkable results.