Global tax compliance has long been a complex, resource-intensive challenge for businesses operating across borders. But what if artificial intelligence (AI) could turn this administrative burden into a strategic advantage? That’s exactly what IBM and the EY organization are achieving with their latest collaboration, bringing cutting-edge AI to the world of tax compliance.
Imagine a tax department that no longer drowns in paperwork or struggles to reconcile data from dozens of sources. Instead, it leverages smart automation to handle repetitive tasks, freeing up professionals to focus on high-value, strategic work. This vision is becoming reality thanks to EY.ai for tax, a suite of AI-powered solutions built with IBM watsonx.
The Power of Partnership: IBM and EY
IBM’s robust AI technology, including the watsonx platform and open-source models like IBM Granite, is now paired with EY’s deep expertise in tax and compliance. Together, they’re tackling some of the biggest pain points for tax departments: limited resources, fragmented enterprise systems, talent shortages, and ever-changing regulations.
Three Game-Changing AI Solutions
Let’s break down the three initial solutions that are already making waves:
Intelligent Tax Data Lake: This tool gathers, enriches, and consolidates transaction data from multiple sources, automating what used to be a painstaking manual process. For IBM’s own tax department, it streamlined data from 36 sources, improving data quality and saving countless hours.
Detect and Correct with Business Documents: Using advanced AI, this solution extracts data from unstructured invoices and cross-checks it with ERP data. The result? Faster, more accurate tax determinations and filings, with far less manual review.
Withholding Tax Determinations: Automating the monthly process of applying the correct withholding tax rates, this tool enables tax professionals to quickly and accurately evaluate thousands of transactions, reducing errors and boosting efficiency.
Real-World Impact: Productivity, Security, and Trust
IBM’s own tax department is already reaping the benefits, expecting to save tens of thousands of hours annually and aiming to automate 80% of its foreign tax compliance. But it’s not just about speed—these solutions are designed with security and trust at their core. Built-in data controls and reconciliation checkpoints help safeguard sensitive information, reducing the risk of costly penalties or reputational damage.
Actionable Takeaways for Businesses
- Embrace automation: Identify repetitive, manual tax processes that could benefit from AI-driven automation.
- Prioritize data quality: Use AI tools to consolidate and validate data from multiple sources, ensuring accuracy in compliance.
- Focus on security: Choose solutions with robust governance and data protection features.
- Invest in upskilling: Equip your tax teams with the knowledge to leverage new technologies effectively.
Looking Ahead
IBM and EY aren’t stopping here. They’re actively working to enhance these solutions and expand their reach to other tax processes, promising even greater efficiency and adaptability for businesses worldwide.
Summary of Key Points:
- IBM and EY have launched AI-powered solutions to automate and streamline global tax compliance.
- The partnership leverages IBM watsonx and EY’s tax expertise.
- Key features include data consolidation, invoice data extraction, and automated withholding tax determinations.
- Solutions prioritize data security and governance.
- Ongoing enhancements aim to expand AI’s role in tax processes.