In-house tax professional are constantly dealing with large datasets, legislation, and the need to ensure accuracy under tight deadlines. Artificial intelligence (AI) can assist by automating calculations to standardise processes and streamline calculation.
Below are three ways AI can enhance tax compliance workflows by: streamlining tax calculations by automating large-scale data analysis; generating sophisticated templates with embedded formulas and logic; and providing a “companion” to discuss or model complex legislative scenarios.
Streamlining Tax Calculations through Automated Large-Scale Data Analysis
Handling Big Data
One of the most significant challenges in tax compliance involves sifting through extensive financial records, company data warehouses or complex accounting software. The tried and tested approach has been to rely on spreadsheets, manual checks, or sampling methods to detect anomalies against materiality levels to ensure adequate compliance and governance has been undertaken. AI tools and techniques can accelerate and improve this process by automatically parsing massive datasets to find patterns, flag discrepancies, and even predict potential risks as the first layer of defence when conducting regular month-end processes.
Take, for example, a multinational corporation with multiple divisions and revenue streams. You might need to confirm whether the right amount of Goods and Services Tax (GST) is collected for each transaction. By leveraging AI algorithms and fine tuning the large language model to specifically identify anomalies, teams can quickly compare data and reported tax amounts, and relevant legislative requirements to identify discrepancies or areas of interest.
Reducing Manual Errors
Because AI excels at crunching large volumes of information at speed, it drastically reduces the chance of overlooking details. AI-driven systems maintain consistency and can be updated to reflect the latest legislative changes, ensuring accurate calculation and reducing the risk of costly audits or penalties. The streamlined approach AI provides means you can spend more time interpreting results and devising strategic recommendations. Instead of combing through spreadsheets, your role shifts toward analysing AI-generated summaries and validating them with professional judgment. This leads to faster closes, fewer bottlenecks, and ultimately more time for high-value activities like advisory and planning.
Creating Templates with Automated Functions and Formulas
Standardising Complex Calculations
Another key aspect of tax compliance is standardising processes, particularly when calculations are repetitive or prone to human error. While advanced spreadsheet software and professionals have become keen users of excel and software products, AI can take things to the next level by automatically generating templates pre-filled with the necessary logic, functions, and interactive elements to generate consistent processes that are applied to all sets of data.
For instance, suppose you need to calculate deferred tax balances for multiple subsidiaries. Instead of manually designing a spreadsheet, you could instruct an AI assistant to create a template that factors in unique local regulations, corporate tax rates, and consolidation rules. The assistant could embed formula-driven rules that automatically retrieve data from your ERP system or designated data lake, thus reducing the need for manual data entry.
A major advantage of AI-powered templates is their ability to dynamically adapt to new information. If a tax rate changes mid-year, the AI system can update all relevant templates across the organisation. Additionally, these templates often come with built-in checks that highlight discrepancies or incomplete fields, nudging the tax team to correct errors on the spot.
AI as a “Companion” for Operationalising Complex Legislation
Turning Legislation into Systematic Logic
One of the toughest parts of tax compliance is translating intricate legislative language into clear, actionable rules for a specific business scenario. AI can serve as a companion by breaking down complicated statutes, discussing how each might apply, and then helping you convert that logic into a systematic flow or calculation.
Consider a complex area like transfer pricing. The legislation might cover arm’s length principles, comparables, and specific rules that differ by jurisdiction. An AI assistant can outline various angles, highlight relevant sections, and suggest a structured approach to building a compliance model. Together, tax teams and the AI can co-develop rules that your company’s systems can follow, ensuring calculations are not only precise but also in line with statutory requirements.
With modern AI tools, tax tams can engage in near-conversational “dialogue,” treating the AI as a knowledgeable colleague. Questions such as , “Given a new environmental levy introduced in Victoria, how can we incorporate it into our monthly excise tax calculations?” can be used to obtain an initial response based on the SRO’s website and any public information available.
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