Challenges of Implementing AI in Transfer Pricing for Global Multinationals

Abstract

In recent years, the implementation of artificial intelligence (AI) has gained traction across various business sectors, notably in the realm of transfer pricing for global multinationals. Transfer pricing, who involves setting prices for transactions between affiliated entities in different jurisdictions, is crucial for tax compliance, financial reporting, and strategic business decisions. However, the adoption of AI technologies presents numerous challenges that can hinder effective implementation. This paper explores the key obstacles faced by multinationals when integrating AI into their transfer pricing strategies, including regulatory complexities, data quality issues, technological limitations, resistance to change, and the need for skilled personnel. By understanding these challenges, multinationals can better navigate the complexities of AI integration and leverage its potential benefits.