Leveraging AI for Effective Transfer Pricing Management in Multinationals

Abstract

Transfer pricing, the process of determining the pricing of goods, services, and intangibles transferred within a multinational corporation (MNC), remains a crucial aspect of global business. It impacts tax liabilities, profitability, and compliance with legal requirements. With increasing globalization and the complexity of international regulations, managing transfer pricing has become a significant challenge for MNCs. Artificial intelligence (AI) offers an innovative approach to addressing these challenges by providing robust solutions that enhance accuracy, reduce compliance risks, and improve decision-making. This paper explores how AI can be leveraged to manage transfer pricing effectively in multinationals, examining its benefits, potential risks, and the future outlook of AI in this domain.