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      Transfer pricing: Why GenAI will significantly simplify the creation of master files and local files in future

      Generative Artificial Intelligence (GenAI) is an innovative technology that makes it possible to automatically create content by extracting, summarising, interpreting and formulating texts and figures from various data sources. With GenAI, the automated creation of transfer pricing documentation becomes a reality.
      Transfer pricing documentation refers to the written recording and analysis of transfer prices between related companies, which includes the creation of both local files and master files to document and support compliance with tax regulations.

      The creation of such documentation is a complex and time-consuming task that places high demands on quality and consistency. GenAI can already significantly simplify and speed up this process.
      By combining GenAI with conventional technologies, the documentation process is considerably simplified for taxpayers. This time saving allows professionals in the transfer pricing department to focus on value-adding activities such as planning or defending transfer pricing during tax audits.

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      Advantages of GenAI for transfer pricing

      Precision and consistency of content

      GenAI can be used to improve the accuracy and consistency of information in master files and local files. Automation can reduce or even prevent errors caused by manual input. In addition, the information in local files and master files can be better harmonised and presented consistently in order to avoid contradictions or inconsistencies. Automation therefore contributes to a higher quality and consistency of transfer pricing documentation.

      Increased efficiency and cost savings

      Companies can automate and optimise their work processes, resulting in significant time and cost savings. An efficient way of working enables companies to utilise their resources for value-adding activities.




       

      Automated creation, full control

      The monitoring of automation by specialised employees remains essential. This is because only they can check the plausibility of the GenAI results and make adjustments if necessary. This ensures that the automated creation of reports and analyses in the transfer pricing area is not only efficient, but also reliable and precise.

       

      GenAI marks an evolutionary step in transfer pricing documentation. The integration of artificial intelligence into the documentation process not only increases efficiency, but also raises the quality of the results to a new level. With GenAI, organisations can better manage the complexity of this task and focus on strategic, value-adding activities while the technology does the tedious work.
      Magdalena Bonna
      Magdalena Bonna

      Partner, Tax, Global Transfer Pricing Services

      KPMG AG Wirtschaftsprüfungsgesellschaft

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      GenAI for the tax department: precision and efficiency

      Innovative process optimisation through GenAI

      The integration of generative AI into tax processes is revolutionising the way tax departments work. GenAI in pre-trained tax chatbots makes it possible to generate immediate and precise answers to tax questions, improves knowledge transfer and reduces the workload of employees. When GenAI is integrated into tax processes, it automates and refines data analysis, increasing efficiency and minimising risk. GenAI helps to minimise errors, refine tax processes and fulfil compliance requirements based on rules. The use of GenAI allows tax experts to focus on strategic tasks by automating routine data entry and calculations. This not only speeds up the processing procedure, but also increases the precision of tax documentation.

      Use case: GenAl for TP documentation

      GenAl will revolutionise the way tax professionals work by automating time-consuming documentation to increase efficiency and maximise productivity.

      • Automated creation of local files and master files
      • Scalable solution for growing requirements
      • Efficient extraction and grouping of transactional data
      • Update according to changing tax regulations

      Benchmarking

      In future, Generative Kl will play a central role in benchmarking, particularly in collecting, analysing and processing data from different companies and sectors.

      • Integration into existing benchmarking processes
      • Collecting and analysing large amounts of data
      • Identification of patterns and trends
      • User-friendly compact analysis based on individual stakeholder needs
      • Improvement of tax compliance including data tracking
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      Video: KPMG Digital Gateway GenAI - automating the daily tasks of finance and tax departments

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