Welcome to the next era of tax compliance: real-time and data-driven

The future of compliance—why now is the time to double down on data-led, proactive approaches.

AI and analytics are revolutionising how tax authorities scrutinise company tax data in real-time—a leap forward that seemed impossible just a few years back. This transformation prompts tax leaders to ask: How can we integrate reliable data and tech-savvy teams into our compliance strategies to meet regulatory expectations?

The combination of today's geopolitical changes, financial pressures, and advanced AI technologies is putting company tax data and compliance processes under the microscope like never before. Globally, tax administrations are investing in AI-driven systems for tax filing and enforcement, analysing, and verifying company processes both in real-time and after submission. The OECD’s Inventory of Tax Technology Initiatives reveals that over 70% of tax authorities now employ AI in managing compliance and taxpayer services. Many are using AI to assess taxpayer risks and support in administrative decision-making. As technology advances, AI's role will rapidly expand.

E-filing is now active across more than 120 countries, and adoption continues to accelerate as governments modernise tax administrations and push for paperless processes—setting the stage for real-time tax reporting. In the UK, HMRC’s Connect tool, while not designed for real-time scrutiny, enhances risk assessments by cross-referencing filed data with other HMRC-held information. This tool generated £4.6bn in tax for 2024/25, marking a 35% increase over previous Connect-powered investigations. Greece's myDATA platform and Australia's AI-matched datasets streamlines VAT and sector discrepancies in real-time. Brazil sets a new standard with its electronic reporting framework, and France uses AI for risk scoring and detecting property improvements. Countries like Poland and Singapore are enhancing fraud prevention and taxpayer assistance through advanced technology, and Latvia and Austria lead in sophisticated modelling.

These advancements exemplify AI's potential to revolutionise tax compliance, pushing us to rethink our strategies and adopt new technology for future growth.

As we transition from traditional reporting to continuous compliance, it's vital for businesses to view data accuracy as a key financial asset. There's no opportunity for corrections after submission—getting it right the first time is essential. To avoid complex and resource-intensive questions and disputes, businesses need to make sure their data is reliable, accurate, complete, and easily accessible to revenue authorities.

The bottom line? Tax and compliance teams need to own their data quality. It's not enough to just collect, retrieve, and file data. They must ensure their 'data story' is accurate from the start, requiring clear audit trails and strong data integrity.

To gain confidence in upstream data, tax leaders need a seat at the table in internal finance transformation discussions. They must transition from passive data consumers to active influencers of data strategy and investment decisions. This means advocating for tax requirements during ERP upgrades, finance automation projects, and data governance frameworks, rather than adding compliance controls later. Real-time data access is no longer optional—it's a regulatory expectation. Tax authorities require detailed transaction visibility. If businesses can't deliver accurate and timely data, they face penalties, reputational harm, and operational challenges.

There is a clear call to action: integrate tax considerations into enterprise data architecture, champion connected systems over isolated solutions, and ensure tax data flows smoothly from source to submission. Ultimately, confidence in upstream data isn't just about technology—it's about governance. Tax leaders need to collaborate with Chief Financial Officers (CFO), Chief Information Officers (CIO), and Chief Data Officers (CDO) to define clear ownership, robust controls, and transparent audit trails. By shaping data strategy early, they can transform compliance from a reactive burden into a proactive advantage.

To target essential data investments, tax leads should identify what's important and assess risk levels within the business. The data-driven processes they establish will not only be valuable for tax compliance but will also enable their organisations to engage more proactively with tax authorities. Whether or not their reporting is challenged, they'll have the data and information needed to justify their positions. And for multinational businesses with global entities, having centralised and unified data is key to supporting connected operations.

Unified tools empower organisations to proactively check data quality across jurisdictions, anticipate challenges before they arise, and ensure readiness for real-time reporting. By combining the right technology with skilled people and effective processes, compliance is transformed into a driver for confident, accurate, and timely data-led reporting.

Today’s AI tools enable companies to replicate the checks tax authorities perform, leading to stringent data quality and comprehensive audit trails from the outset. Automating upstream ERP controls is key to verifying data accuracy from the start. This shift turns compliance from a reactive obligation into a strategic advantage.

Our collaboration extends to providing advanced solutions like PwC’s Google Cloud-based Data Controls Engine, SAP’s Risk Assurance Management, and Workday’s Financial Management platforms. These resources enable seamless automation of data flows, reinforced control, and streamlined compliance across jurisdictions. The Data Controls Engine, integral to PwC's Sightline ecosystem and Connected Tax Compliance offering, enhances data quality through powerful diagnostics—quickly identifying errors and examining source data within a unified, cloud-based platform. It simplifies challenges in multi-ERP environments by standardising control measures and preparing data for downstream processes like VAT returns.

Moreover, our Global Tax Audit Portal (GTAP) furnishes clients with 360-degree visibility into their tax positions and ongoing inquiries, consolidating crucial data and correspondence with tax authorities. Our tool helps you actively manage risks and confirm consistent responses to potential challenges. By spotting high-risk areas, Global Tax Audit Portal gives you the chance to gather evidence and respond to tax authority scrutiny with confidence.

The time for reactive compliance is over. Tax leaders who take decisive action today can transform compliance from a cost centre into a strategic asset. Here are three key actions for tax leaders to prioritise:

1. Own the integrity of upstream data
   Influence finance transformation from the start—embed tax requirements into ERP upgrades and automation projects to ensure accuracy at source.
2. Build a connected, technology-driven ecosystem
   Harness AI, automation, and integrated platforms to deliver real-time visibility, digital audit trails, and seamless compliance across jurisdictions.
3. Establish strong governance through collaboration
   Partner with CFOs, CIOs, and CDO to define clear ownership, robust controls, and transparent processes. Governance is the foundation of trust.

Each step forward not only strengthens compliance and prepares organisations for evolving compliance requirements but also enhances the strategic value that accurate data brings to the business. The call to action is clear, now’s the time to start.

Unlock real business outcomes with our Connected Tax Compliance Technology Suite

The time is now to start taking the steps to strengthen your compliance framework—enhancing the strategic value that accurate data brings to the business.

From Pillar Two to indirect tax, Sightline and our connected ecosystem help you stay ahead of change with confidence. Explore how AI-powered tools, trusted data, and strategic alliances simplify complexity and deliver the tangible business outcomes you need. Discover how the Connective Tax Compliance Technology Suite can empower the future of your tax compliance.