Munich/Saarbrücken, 13/10/2017 – Artificial Intelligence (AI) is set to revolutionise work in tax departments. This is the conclusion reached by the German Research Centre for Artificial Intelligence (DFKI) and the international tax consulting firm, WTS, in their joint study which investigated the specific use of AI technologies in the field of taxation.
In close cooperation with their industrial partners Audi, Bosch, E.ON and Henkel, DFKI and WTS investigated AI key technologies with the aim of providing additional support and automating both standard tasks and more challenging activities in the field of taxation. They closely examined various types of taxes, identified specific application scenarios for AI technologies and developed the first software prototypes.
Great potential of AI technology for wage tax and VAT, customs and transfer pricing
Within the scope of the study, the DFKI and WTS identified the potential of the AI disciplines machine learning, process mining, information extraction, knowledge management, speech processing and multi-modal systems for various control applications. The results show that wage tax and VAT, customs and transfer ¬pricing are highly suitable for the use of AI technologies when complex routine tasks are performed and large amounts of information are evaluated. Examples of such areas of AI application include the correct tax assessment of benefits-in-kind and VAT-based audits.
"Tax departments need to deal with enormous amounts of data every day. At the same time, companies are confronted with increasingly complex legal regulations and need to fulfil the strict compliance requirements," commented Fritz Esterer, CEO of WTS Germany, Chairman of the Board of WTS Global. "This is exactly where we started. We want to use self-learning AI systems to further develop classic tax tools and consequently improve the automated processing of tax-relevant mass data. This accelerates control processes and creates significantly higher compliance reliability."
"Basic Artificial Intelligence technology has already reached a high degree of technical maturity in many fields of application, and has led to innovation - including tax system innovations. Many tasks in the field of tax are manual and repetitive activities. These are ideal conditions for the use of AI," explains Prof. Dr. Peter Fettke, Scientific Director of the study at DFKI.
Fettke adds: "In the future, we expect AI systems to take over tasks for tax departments. However, this is only the case for activities that require a low level of social intelligence, creativity, and environmental interaction. In the field of tax structuring and enforcement, however, it is currently impossible to imagine that tax advice can be fully replaced by intelligent tax solutions."
Initial prototypes show where the journey is going
Together with their industrial partners, DFKI and WTS have used the technological building blocks of the aforementioned AI disciplines to build a total of five prototypes for various fields of application. This includes the software, Detection, which demonstrates the ¬recognition of unknown errors and anomalies in mass data, such as transactions¬ in the field of customs duties. A special feature: The AI algorithms anchored into the system automatically learn from large amounts of data. This can reveal errors that have never occurred to people in the past.
Another prototype is Q&A. This innovative assistance system helps its users to quickly and easily access relevant control information and execute verbal commands. Q&A is an example of a further trend in the field of taxation: The complexity of tax legislation will be reduced by AI. For instance, the question-and-answer system makes it possible for people who are not tax professionals to obtain decision-making support for tax issues from an AI solution. The software is also being used to develop horizontal networking with other company departments. This aspect is becoming increasingly important for tax departments.
The cooperation continues
As part of a long-term strategic partnership, WTS and the DFKI are working together to forge ahead with scientific research into AI and taxation. Their partners in industry, consulting and science will develop additional specific application scenarios, enrich existing tax tools with AI elements and create more advanced software prototypes. The results of the research cooperation will be used to create viable and ready-to-use AI solutions for tax departments as well as utilise the identified potentials of AI in the area of taxation.