Opportunities and Risks of Artificial Intelligence in Transfer Pricing and Tax Compliance

Abstract

Artificial Intelligence (AI) is transforming the landscape of transfer pricing and tax compliance, providing significant opportunities and presenting notable risks. This research paper explores the dual nature of AI in these domains, detailing how AI can enhance accuracy, efficiency, and compliance in tax reporting while also highlighting the potential pitfalls such as data privacy concerns, bias in algorithms, and regulatory challenges. By analyzing current applications of AI in transfer pricing and tax compliance, as well as identifying the associated risks, this paper aims to inform stakeholders about the implications of AI integration in financial practices.