AI is everywhere in tax - but what’s right for you?
Have you noticed how just about every tax technology solution is now AI-powered?
There are hundreds of products out there, all promising transformative capabilities for tax teams. Heads of Tax tell us they’re being bombarded with pitches for a dizzying array of tools.
As with finding the killer use cases for your tax function, deciding which software to invest in can feel overwhelming. It’s easy to get distracted by the latest launch to hit the market.
With that in mind, here are a few practical steps to help you through the labyrinth.
1. Review your internal tools
Before looking at specialist tax solutions, find out what your enterprise AI already offers – in many cases, that’s likely to be Microsoft Copilot.
General models like Copilot excel at everyday administrative tasks, from writing emails to summarising meetings. With the right contextualisation and tuning, they can also handle some basic tax activities. These include performing initial reviews of tax returns; mining credits and incentives opportunities in large, complex contracts; or detecting anomalies in the tax codes being applied to transactions.
What’s more, you may be able to build personas and agents within them for even more specific tax work.
2. Identify the gaps
That said, general-purpose AI models won’t cover everything a tax team needs to do (though experts believe their tax capabilities will improve to a point where they may be able to in the near future).
More technical tasks, like preparing returns or transfer pricing documentation, will demand specialist solutions. You’ll need to pinpoint the activities for which investment in new technology will be necessary.
3. Align solutions with your tech strategy
Sit down early on with your IT colleagues to check the solutions you’re considering are compatible with your firm’s wider technology strategy and infrastructure.
There are many stories of tax teams spending hours selecting and even trialling tools, only for the IT function to reject their implementation – due to incompatibility with the IT strategy, and to avoid expanding the IT estate.
4. Evaluate your options
Choosing the right tool isn’t just a technology exercise. Starting with the use cases you wish to progress, assess the products you’re considering from all angles:
· Functionality – how will it deliver your specific use cases?
· Benefits – can you quantify the benefits it offers in tangible terms, such as hours saved?
· Compatibility – how will it align and integrate with your IT strategy, architecture and data structures?
· Cost – does it fit within your budget, and how competitive is the price?
· Demonstrability – can you run a trial to see how it works in practice and how effective it’s likely to be?
· References – are there credible reviews and testimonies from current users?
5. Keep looking forward
AI is moving at breakneck speed: in a year or two, the landscape will look very different. So keep an eye on what’s on the horizon, and build an agile tax technology strategy that can adapt to new innovations.
1. Review your internal tools
Before looking at specialist tax solutions, find out what your enterprise AI already offers – in many cases, that’s likely to be Microsoft Copilot.
General models like Copilot excel at everyday administrative tasks, from writing emails to summarising meetings. With the right contextualisation and tuning, they can also handle some basic tax activities. These include performing initial reviews of tax returns; mining credits and incentives opportunities in large, complex contracts; or detecting anomalies in the tax codes being applied to transactions.
What’s more, you may be able to build personas and agents within them for even more specific tax work.
2. Identify the gaps
That said, general-purpose AI models won’t cover everything a tax team needs to do (though experts believe their tax capabilities will improve to a point where they may be able to in the near future).
More technical tasks, like preparing returns or transfer pricing documentation, will demand specialist solutions. You’ll need to pinpoint the activities for which investment in new technology will be necessary.
3. Align solutions with your tech strategy
Sit down early on with your IT colleagues to check the solutions you’re considering are compatible with your firm’s wider technology strategy and infrastructure.
There are many stories of tax teams spending hours selecting and even trialling tools, only for the IT function to reject their implementation – due to incompatibility with the IT strategy, and to avoid expanding the IT estate.
4. Evaluate your options
Choosing the right tool isn’t just a technology exercise. Starting with the use cases you wish to progress, assess the products you’re considering from all angles:
· Functionality – how will it deliver your specific use cases?
· Benefits – can you quantify the benefits it offers in tangible terms, such as hours saved?
· Compatibility – how will it align and integrate with your IT strategy, architecture and data structures?
· Cost – does it fit within your budget, and how competitive is the price?
· Demonstrability – can you run a trial to see how it works in practice and how effective it’s likely to be?
· References – are there credible reviews and testimonies from current users?
5. Keep looking forward
AI is moving at breakneck speed: in a year or two, the landscape will look very different. So keep an eye on what’s on the horizon, and build an agile tax technology strategy that can adapt to new innovations.
Bring in the experts
Our final piece of advice would be: don’t go it alone.
There’s a lot of noise to cut through, and AI is new territory for most tax leaders. Plus, there are tax authorities’ expectations to meet regarding the appropriate governance of AI solutions. So seek advice on the options available to you, and how best to explore them.
KPMG’s dedicated tax technology experts can help you to:
- discover which tax activities your firm’s enterprise AI model can support
- identify and assess the specialist AI solutions that meet your specific needs
- get the most from the tools you decide to invest in
- stay up to date as AI technology evolves
Digital Gateway, our web-based tax and legal platform, gives you instant access to the latest gen AI-enabled tax tools in a safe and secure environment. It can be quickly and easily embedded into your tax operations and data structures. Please get in touch to find out more.
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