Transfer Pricing Meets Artificial Intelligence: Challenges for Global Tax Systems

Abstract

This research paper explores the intersection of transfer pricing and artificial intelligence (AI) within the framework of global tax systems. Transfer pricing, a method used by multinational corporations (MNCs) to allocate income and expenses among their subsidiaries in different jurisdictions, has long been a focal point for tax authorities. With the advent of AI, the complexities of transfer pricing are heightened, presenting both challenges and opportunities for tax compliance, enforcement, and administration. This paper examines the current landscape of transfer pricing, the role of AI in enhancing or complicating compliance, and the implications for global tax systems. By identifying key challenges, the paper aims to provide insights into potential solutions for policymakers and practitioners navigating this evolving landscape.