AI Meets Transfer Pricing: Navigating Compliance, Efficiency, and Ethical Concerns

Abstract

The integration of artificial intelligence (AI) in transfer pricing has transformed how multinational enterprises (MNEs) navigate compliance, efficiency, and ethical challenges. Transfer pricing, the pricing of goods and services between affiliated entities within a multinational company, is critical for tax compliance and financial reporting. This paper explores the intersection of AI and transfer pricing, focusing on AI's ability to enhance compliance with regulatory requirements, streamline operations for increased efficiency, and address ethical concerns inherent in transfer pricing practices. The paper argues that while AI offers significant advantages, it also poses challenges that necessitate a comprehensive framework to guide its implementation in transfer pricing strategies. Ultimately, the study highlights the need for ongoing collaboration among stakeholders to ensure that AI's benefits are maximized while minimizing potential risks.