Study findings and prospects: How Artificial Intelligence can be applied to taxation
In our practical innovation study, we have jointly investigated the potential that Artificial Intelligence (AI) holds for the field of taxation and how it will impact the work of qualified tax advisors.
The findings are extremely exciting and of practical relevance even at this early stage:
We have developed central AI technology modules for the tax types we investigated, and evaluated these in terms of concrete opportunities for implementation in practice. In customs declaration procedures, for example, AI technologies from the fields of Process Mining and Machine Learning can be used to classify information from various upstream systems, which reduces the likelihood of errors and saves a large amount of time. AI technologies can also help with the extraction of information (e.g. through text mining in connection with optical character recognition) and ensure that invoice verification for VAT purposes is complete and correct. This makes intelligent automation of complex routine tasks a possibility. In risk manage-ment, AI technologies such as anomaly detection and process diagnostics help to monitor key figures which are relevant for taxation. They can also provide support during compliance checks of relevant data. Tax risks can be greatly reduced as a result.
Within the end-to-end processes that we looked at, we have identified a number of scenarios in which AI can be used. For example, we looked at how AI can be used to help ensure that benefits-in-kind are assessed correctly from an income tax perspective, through the use of AI technolo-gies in document analysis, information extraction and classification of unstructured transactional data. This can instantly lead to tremendous increases in productivity and improvements in quality.
AI can be used to automate tasks that require little social intelligence and creativity and few interactions with the surrounding environment. Consequently, wide-reaching changes to the spectrum of activities in tax consulting are to be expected.
As part of a long-term strategic partnership, WTS and DFKI are working together to advance scientific research into AI and taxation. We are also cooperating with leading international companies to develop new concrete application scenarios as well as to add AI elements to existing tax tools and further develop our software proto-types. With the findings of our joint research, we aim to create practical AI solutions that are ready to use in the field of taxation – and by doing so make the most of AI’s potential for tax consultants and their clients.