How Generative AI is Transforming Tax Functions

Generative AI (GenAI) is making tremendous progress in modernising the tax profession by providing a variety of benefits that improve efficiency, accuracy, and strategic decision making. Here's an in-depth look at how GenAI is used in various tax functions

Beibei Flynn

6/2/20242 min read

✨✨✨ Major Areas of Impact

1. Tax Compliance - GenAI simplifies tax compliance by automating data capture, computation, and reconciliation, saving time. Automating these processes allows tax experts to focus on strategic initiatives beyond compliance

2. Risk Management - GenAI helps large multinational organisations quickly identify and summarise important tax changes across many jurisdictions. This enables tax professionals to effectively manage risk and make timely, educated judgements.

3. Tax Controversy - GenAI helps prepare for tax litigation by evaluating large volumes of data and maintaining consistent communication with tax authorities across different countries. This helps offer clear and simple arguments during tax disputes.

4. Tax Advising and Planning - GenAI improves tax advising services by offering rapid access to consolidated knowledge and insights. This allows tax professionals to concentrate on producing value through strategic planning and assessing the tax consequences of business actions.

5. Knowledge Management: Technology helps collect and analyse large amounts of tax data. This is vital in an environment where tax rules and regulations are constantly evolving.

6. Transactional Activities - GenAI improves access to important information, facilitates decision-making, and simplifies communication of complicated tax ideas to stakeholders.

7. Business Integration – GenAI improves corporate integration by analysing data in real time and creating simplified narratives for complicated tax topics. This includes providing tailored executive summaries and tax effect studies.

📌📌📌 Strategic Advantages
  • GenAI automates routine operations such as document preparation, form filling, and preliminary evaluations, allowing tax professionals to focus on more valuable activities.

  • The technology enhances data analysis by recognising patterns, identifying issues, and summarising rules and cases, leading to more efficient and accurate tax research and planning.

  • GenAI simplifies complex tax challenges into business-friendly narratives, leading to better strategic decision-making.

🤔🤔🤔 Future Outlook

GenAI integration into tax processes is more than just a technology update; it is a strategic shift that will change the way tax professionals work. As GenAI evolves, its powers in automating regular chores, improving data analysis, and assisting strategic planning will become more even more sophisticated, driving further efficiencies and innovation in the tax profession.

By leveraging the power of GenAI, tax functions can transform from being compliance-focused to value-driven, positioning themselves as strategic partners within their organisations.

For more detailed insights and specific use cases, you can explore the relevant articles from some of the industry leaders below:

https://www.kpmg.com/ie/en/home/insights/2024/01/the-use-of-generative-ai-tax.html

https://www.wolterskluwer.com/en/know/artificial-intelligence-tax-accounting

https://www.deloitte.com/global/en/services/tax/services/generative-artificial-intelligence-for-tax.html

https://www.bdo.com/insights/tax/the-future-of-ai-is-now-is-tax-ready

https://www.internationaltaxreview.com/article/2cixmaxdqvp65w0olg1ds/sponsored/the-use-of-generative-ai-tools-in-the-tax-profession

https://www.pwc.com/us/en/tech-effect/ai-analytics/generative-ai-insights-for-tax-leaders.html