AI in tax use cases: a question of adoption

Struggling to know where to start with AI? Your adoption strategy is key to finding the right tax use cases, say Chris Rogers and Christoph Steiner.

“Where do we even begin?”

This is a familiar refrain from our conversations with tax leaders about embracing artificial intelligence. There’s no end of hype surrounding AI’s potential to transform business functions, including tax. And there are hundreds of AI-powered tax tools out there. The result is an almost overwhelming list of potential use cases for AI in tax.

That doesn’t mean basic administration, like writing emails and scheduling appointments: they’re not tax use cases.

Genuine tax use cases include reviewing and summarising huge amounts of documentation for a due diligence exercise, which would take humans thousands of hours to complete. They include uncovering value by identifying relevant credits and incentives, such as R&D or capital allowance claims.

AI solutions can also review tax returns and spot inaccurate or sub-optimal positions. They can analyse large volumes of transactional data, distinguish between deductible and non-deductible spend, or unearth anomalies in VAT code allocations.

They can even assess the permanent establishment risks in a transaction or business development – then write the risk memo for you.

Little wonder, then, that tax leaders are struggling to know where to start.

Adopt or transform?

The first point to make is that ‘where to start with AI’ isn’t actually a technology question. Rather, it’s a question of your wider adoption strategy. Where does your approach sit on a spectrum between the following two scenarios?

Tactical deployment of point solutions to drive incremental improvements – such as automating repetitive tasks or resolving pain points. This should be based on a detailed analysis of your current state and the activities your team performs.
The end-to-end transformation of your tax data, processes and technology. This involves re-imagining your tax function for the future, and embedding AI wherever it will be beneficial.

Ultimately, all tax functions should be aiming for the transformational end of the spectrum. But how far along you start the journey will be different for each organisation.

It will depend on the business’s overall strategy; how ambitious you’re willing to be; and inevitably your budget. What do you need AI to achieve within your tax function, now and in the future? How far are you prepared to go, and how fast? What resources are available to support your AI journey?

Finding your place

Knowing where you should be on the spectrum will help to make clear which use cases to get started with. To find the right entry point for your tax function, we’d recommend going through these four steps:

Get familiar with AI

Carve out time to understand AI and how to use it. Consider the direction it’s going in, and what that means specifically for your tax function and team.
Determine the art of the possible

What can AI realistically achieve within the context of your particular tax operations? Don’t be swayed by the hype; but at the same time, don’t underestimate AI’s transformative potential.
Put specific goals in place

Make change happen by setting objectives for AI use – such as productivity improvements or budget reductions. For example, can AI help your team achieve the same outputs and quality with 10% less resource?
Make a three-year plan

AI adoption doesn't happen overnight. So develop a plan around opportunities that can scale up and snowball. Which use cases will unlock further incremental gains? How will your end-state vision be built up, proving value and building confidence over time?

Before embarking on this journey, however, there’s one quick and easy step all tax leaders can – and should – take immediately.

Give your team access to AI tools right away. Let them experience and explore them, and get used to working with them as soon as possible.

The barriers to entry are extremely low. For instance, users of KPMG's Digital Gateway platform can take advantage the latest AI-enabled tax tools – from custom GPTs to agentic capabilities - in a secure environment.

The sooner your team starts experimenting with AI, the sooner you’ll find the use cases that will revolutionise your tax operations. AI innovation is only speeding up: doing nothing is not an option.

KPMG’s tax and technology experts can help you identify the ideal use cases for your tax function. Please get in touch to see how we can get your AI journey started.

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