AI and Transfer Pricing: Redefining the Global Tax Landscape

Abstract

In the contemporary globalized economy, transfer pricing remains one of the most debated and challenging areas of international taxation. With the integration of artificial intelligence (AI) technologies into business models, the landscape of transfer pricing is undergoing significant changes. AI has not only transformed how companies operate across borders but also introduced complexities in determining the fair value of intercompany transactions. This paper examines how AI is reshaping transfer pricing rules and regulations, influencing multinational enterprises (MNEs) and tax authorities worldwide. It explores the opportunities and challenges posed by AI in achieving transparency, compliance, and fairness in transfer pricing, alongside its potential to disrupt existing norms. Additionally, the paper offers insights into the future of transfer pricing in the digital age, emphasizing the need for dynamic regulatory frameworks and technological adaptation.