Transforming transfer pricing processes

The company operates in a highly complex tax environment, with OECD guidelines that require the collection of extensive qualitative and quantitative data from a wide range of sources. Following a reduction in the number of its transfer pricing employees, the company’s finance department set out to improve the efficiency of its transfer pricing documentation process.

To fill the company’s immediate resource gap, KPMG Germany introduced a collaborative opportunity to develop a proof of concept for using Generative AI (Gen AI) to automate the documentation process. The solution would allow AI to prepare the transfer pricing documents and allow employees to focus on reviewing the output for accuracy and clarity.

This approach would reduce the need to hire additional employees, while also changing the nature of existing roles — freeing employees from repetitive tasks and giving them the opportunity to focus on higher-value work.

Importantly, this initiative also served as a strategic starting point for scaling AI-powered automation in other end-to-end business operations across the company.

Less manual effort — greater strategic focus

The implementation of Gen AI has helped reduce the manual effort required in the documentation process to just 5 percent. This shift represents a significant improvement in process efficiency, with routine tasks now running almost entirely in the background. Beyond automation, this new approach is also enhancing workforce productivity and opening up new opportunities for value-adding activities such as analyzing the company’s tax strategies and identifying ways to optimize other aspects of its business models with AI.

Scalability

The Gen AI solution has helped the company automate a task that has never been automated before. This was an important step — moving the company from simply being curious about AI to actively using it with confidence.

The success of the transfer pricing project is just the start. It has shown what’s possible and opened the door for more projects across the company. As AI use grows, more ways to use the technology to achieve real business results will continue to grow as companies move from being “AI curious” to becoming committed “AI advocates”. 

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