The Role of AI in Enhancing Transfer Pricing Accuracy and Efficiency

Abstract

Transfer pricing, the method by which multinational corporations allocate income and expenses among their subsidiaries in different jurisdictions, has become increasingly complex due to globalization, regulatory scrutiny, and technological advancements. The advent of artificial intelligence (AI) offers new opportunities for enhancing the accuracy and efficiency of transfer pricing processes. This paper explores how AI technologies, including machine learning, natural language processing, and predictive analytics, contribute to better data management, improved compliance, and more informed decision-making in transfer pricing. By analyzing current practices and case studies, this research aims to highlight the potential of AI in addressing the challenges faced by tax professionals and corporations in their transfer pricing strategies. The findings indicate that AI not only streamlines operations but also provides valuable insights that can lead to significant cost savings and risk mitigation.