EUROPE-WIDE Trends and Developments Contributed by: Munshya Mupela, Semra Altıntaş, Shirley Li and Joyce Lo, TPA Global
and co-ordinated workflows under stricter govern - ance. Understanding where an organisation sits in this progression is important, as it determines both achievable automation and governance requirements. Human–machine partnership and orchestrated workflows The interaction between humans and technology is evolving toward a functional partnership. Systems provide scale through data processing and automa - tion, while professionals contribute judgment and interpretation. Tax processes are increasingly organ - ised through orchestrated workflows, where systems handle routine tasks and escalate more complex mat - ters to experts. In practice, this requires tax profes - sionals to focus on supervising outputs, validating results, and intervening where judgment is required, rather than performing manual processing tasks. A “New Rome” architecture and distribution of authority Tax processes are well suited to more advanced use of technology because they are structured and largely rule-based. As systems become more capa - ble, they support not only execution but also parts of the analysis, making it essential to clearly define responsibilities. Without proper governance, deci - sion-making may become overly dependent on sys - tem outputs, weakening accountability. To avoid this, both tax authorities and taxpayers should operate within a “New Rome” architecture (see fig 1). This is one where data, systems, and human oversight are aligned and roles are clearly defined. Systems should support processing and analysis, while responsibility for interpretation and decisions remains with profes - sionals, ensuring that control stays visible. Auditability and “human-in-the-loop” validation At the core of this transformation is a single-source architecture that separates raw data from the infor - mation generated by applying tax logic. Trust in such systems should be anchored in auditability – the abil - ity to trace, reconstruct and verify outcomes based on underlying data and applied rules. This is more important than relying on explanations alone. It also requires avoiding fragmented or inconsistent data, as this directly affects the reliability of the outputs. For both tax authorities and taxpayers, this means ensur -
ing strong data readiness and embedding human- in-the-loop controls at key points, so that results are reviewed and validated before further automation is applied. Conclusion Tax technology is no longer a supporting function but a core determinant of how tax systems operate. Developments such as DAC7, DAC8, Pillar Two, and ViDA are pushing both tax authorities and taxpayers to redesign their processes around data integrity, auto - mation and real‑time control. Operating effectively in this environment means moving beyond isolated tools and focusing on structured governance frame - works, clear allocation of responsibilities, and reli - able data foundations. Organisations that treat tax as an end‑to‑end, technology‑enabled process, rather than a reporting obligation, will be better positioned to operate effectively as digital tax administration con - tinues to evolve. How the Interplay Between CbCR and VCA Gives a Different Perspective Author: Shirley Li Introduction Transfer pricing is traditionally viewed as a transac - tional tool that is assessed at the level of individual controlled transactions. However, a purely transac - tion‑by‑transaction perspective may result in profit allocations that do not fully reflect the broader value chain or the actual contributors to value creation. With the increasing transparency brought by coun - try-by-country reporting (CbCR) and Pillar Two dis - closures, tax authorities are becoming more aware of the value‑chain perspective embedded within transfer pricing outcomes. Consequently, they are now more inclined to question how intra‑group prices are set and how the overall profit is divided among all entities participating in the value chain. What is CbCR and value chain analysis? CbCR, in both its private (tax authority) and public (stakeholder-facing) formats, offers a consolidated, jurisdiction-level portrayal of an MNE’s global foot - print. Private CbCR contains detailed quantitative data – revenues, profits, taxes, employees, tangible assets and main activities. Public CbCR reveals key
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