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Connecting tax compliance to drive efficiency, visibility and value
Businesses can reduce duplication, improve efficiency and gain better insight from their data by connecting their tax compliance functions, according to Varnavas Nicolaou, partner, tax and legal at PwC Cyprus, who argues that increasing regulatory demands, greater scrutiny and continued pressure on resources are making traditional compliance models increasingly difficult to sustain.
Nicolaou explained that, for many businesses, tax compliance has traditionally developed around individual obligations. Corporate income tax, VAT, transfer pricing, Pillar Two and other reporting requirements may involve different teams, different processes, different technologies and, often, repeated requests for overlapping data.
“That model is becoming increasingly difficult to sustain,” he said, referring to the growing pressure businesses face to manage costs, address resource constraints and obtain better insight from their data as regulatory requirements expand and tax authorities increase their scrutiny.
He also identified fragmented and low-quality data, increasing regulatory demands, rising audit activity, limited visibility and cost pressures among the challenges facing clients today.
According to Nicolaou, the question for tax leaders is therefore changing. It is no longer simply “How do we complete each compliance obligation?” but increasingly “How do we connect compliance so that the same data, processes and controls work harder for the organisation?”
He explained that connecting tax compliance does not mean removing the technical expertise required for individual taxes or jurisdictions. Rather, it means creating an operating model in which people, processes, data and technology work together rather than in parallel.
At the centre of that model, he added, is data.
Traditionally, similar financial and operational information may be collected several times to support different tax obligations. A connected model seeks to capture data intelligently, standardise and enhance it, and make it available for multiple compliance purposes.
As an example, Nicolaou referred to PwC’s Connected Tax Compliance approach, which describes a model of acquiring, enhancing, using and reusing data across areas including corporate income tax, statutory financial statements, indirect taxes, Pillar Two, transfer pricing and other tax services.
“This apparently simple change has significant implications,” he pointed out, identifying efficiency as the first benefit.
When compliance processes operate independently, organisations can find themselves maintaining multiple workflows, reconciling similar datasets and responding to repeated information requests. Connecting these activities, he explained, creates opportunities to standardise inputs, automate routine processes and eliminate duplication.
At the same time, Nicolaou stressed that “The technology should support the process, rather than become another layer of complexity.”
He noted that PwC’s approach combines workflow, data gathering, collaboration, progress reporting, governance, controls and analytics within a connected technology environment.
Importantly, he clarified that increased automation does not mean removing people from tax compliance.
Instead, Nicolaou described the emerging model as “technology- and AI-powered but human-enabled”, explaining that routine activities can increasingly be automated while professional judgement remains focused on areas where technical interpretation, risk assessment and business understanding matter most.
“That distinction is critical,” he stressed, adding that “The objective is not automation for its own sake.”
The aim, he explained, is to free scarce tax resources from repetitive administration and allow them to concentrate on higher-value activities.
Beyond efficiency, Nicolaou identified visibility as another important benefit of connecting compliance functions.
As he explained, a connected compliance environment gives management something that fragmented processes often struggle to provide.
Instead of managing obligations through separate spreadsheets, email trails and local processes, a connected model can provide central oversight of status, responsibilities, data and risk.
In this respect, he referred to PwC’s Connected Tax Compliance methodology, which provides for end-to-end visibility across workstreams, centralised governance and digital audit trails, supported by technology for oversight and coordination across jurisdictions.
This matters particularly for multinational and multi-entity businesses, Nicolaou noted, as management needs to understand not only whether a return has been filed, but where information is incomplete, where risks are emerging and where intervention may be required.
He also drew attention to the measurable benefits of technology investment beyond tax, citing PwC’s Global Compliance Survey, 2025.
According to the findings he presented, organisations investing in technology and data for compliance reported benefits including better visibility of risks and risk-management activities, 64 per cent, faster identification and response to compliance issues, 53 per cent, and more insightful reporting, 48 per cent.
Other benefits included faster or more confident decision-making, 46 per cent, and increased productivity, efficiencies and cost savings, 43 per cent.
For Nicolaou, these findings illustrate how visibility changes compliance from a retrospective reporting exercise into a more active management process.
The third opportunity, which he described as perhaps the most important, concerns using compliance data to see more.
He explained that businesses already invest substantial effort in gathering, validating and analysing information for tax compliance. Once that information is structured and connected, the organisation has an opportunity to use it for more than producing returns.
Connected data and analytics, he added, can help identify trends, risks and opportunities that would otherwise remain buried across individual compliance processes.
Nicolaou again referred to PwC’s Connected Tax Compliance approach, highlighting potential insights around cash tax savings, tax-efficient strategies, tax controls, tax risks, deal readiness and the implications of regulatory change.
This, he argued, represents a fundamental shift in perspective, as “Compliance becomes not only an obligation to satisfy, but a dataset from which the business can learn.”
To illustrate the point, he explained that information collected across entities and jurisdictions may expose inconsistencies requiring attention, while common datasets can support several reporting requirements.
Similarly, dashboards can concentrate management attention on exceptions rather than every individual process.
He added that information historically examined only when preparing a return can contribute to earlier conversations about tax risk and business decisions.
In the same context, Nicolaou cited PwC’s Global Compliance Survey, which notes organisations rationalising data sources to create a “single version of the truth” and mapping controls where common controls can address multiple reporting obligations.
For organisations considering this journey, Nicolaou stressed that the starting point should not necessarily be a new technology platform.
Instead, he called for an examination of the whole compliance ecosystem, beginning with the questions “Where are we requesting the same data more than once?” and “Which processes are genuinely different and which have simply developed separately?”
He also raised the question “Which activities require specialist human judgement, and which can be standardised or automated?” alongside “Can common controls support several compliance obligations?”
Equally important, he noted, is whether management has a clear view of compliance status and emerging risk across the organisation.
Finally, Nicolaou asked “are we using the information generated through compliance to identify opportunities and support better business decisions?”
The appropriate answer, he explained, will differ between organisations.
A connected model can support different delivery models, from insourcing and co-sourcing through outsourcing and managed services.
“What matters is that the components operate as part of a coherent system rather than as isolated solutions,” he stressed.
Looking beyond the tax return, Nicolaou maintained that the future of tax compliance is not simply about completing the same processes faster.
“It is about connecting them,” he said, explaining that connecting data reduces duplication, while connecting technology and processes creates efficiency and control.
Connecting teams, he added, provides clearer accountability, while connecting the resulting information gives tax leaders an opportunity to turn compliance activity into insight.
For businesses facing more regulation, greater scrutiny and continued pressure on resources, Nicolaou stressed that this distinction matters.
“The organisations that gain most from compliance will not necessarily be those that do more compliance,” he concluded, adding that “They will be those that connect it better.”
