Revolutionizing Tax Compliance with AI: IBM and EY’s Collaborative Breakthrough
In a significant step towards transforming the tax compliance landscape, IBM, a leader in global technology solutions, has partnered with EY, a prominent professional services organization, to introduce an innovative AI-driven solution. This joint effort aims to address some of the most pressing challenges faced by tax departments worldwide. The newly launched EY.ai for tax, developed using IBM watsonx technology, represents a fusion of advanced artificial intelligence capabilities and deep tax domain expertise.
A New Era for Tax Compliance
The collaboration between IBM and EY marks a pivotal moment in the evolution of tax compliance. As businesses grapple with complex regulations, limited resources, and talent shortages, the introduction of intelligent AI solutions is set to revolutionize the way tax departments operate. By leveraging open-source AI models, including the IBM Granite framework, EY.ai for tax aims to automate tax compliance processes and streamline global data management.
Martin Fiore, EY Americas Deputy Vice Chair for Tax, emphasized the transformative potential of this alliance. He highlighted how the integration of emerging technologies with EY’s tax expertise is enabling businesses to shift their perception of tax from a mere administrative task to a value-creating function. This paradigm shift is made possible by AI-enabled solutions that not only enhance efficiency but also prioritize governance and trust.
Unveiling the AI-Enabled Tax Solutions
The introduction of EY.ai for tax brings forth three cutting-edge AI-powered solutions designed to tackle specific tax-related challenges:
Intelligent Tax Data Lake
This solution leverages a combination of IBM watsonx.data, watsonx.ai, and open-source models to gather, enrich, and consolidate transaction data from various sources for tax filings. For IBM’s own tax department, this solution has streamlined data consolidation from 36 different sources, automating what was once a manual process. The built-in data controls and reconciliation checkpoints ensure the production of high-quality data, enhancing the accuracy and reliability of tax filings.
Detect and Correct with Business Documents
Utilizing watsonx.ai and IBM Research’s open-source toolkit Docling, this solution extracts data from unstructured invoices to compare and correct enterprise resource planning (ERP) data for tax determinations and filings. By automating the review of source documents, IBM has significantly increased the number of documents processed, transforming a previously manual task into an efficient, automated process.
Withholding Tax Determinations
Developed with watsonx.ai, this solution automates the monthly process of determining the appropriate withholding tax rate for individual transactions. IBM tax professionals can now evaluate thousands of intercompany transactions more quickly and accurately, thanks to this advanced AI capability.
Transforming Tax Departments Globally
The implementation of these AI solutions has already yielded impressive results within IBM’s own tax department. By automating time-consuming manual processes, IBM is projected to save tens of thousands of hours annually. The goal is to automate 80% of foreign tax compliance, significantly enhancing efficiency and productivity.
In addition to the operational benefits, the solutions prioritize security and trust, safeguarding sensitive tax data and minimizing the risk of costly penalties or reputational damage. Kanthi Morrissey, IBM Vice President and Chief Tax Officer, underscored the transformative impact of combining EY’s domain expertise with IBM’s AI technology. This collaboration has empowered IBM’s tax department to manage vast volumes of granular data from diverse sources, enabling them to focus on more strategic initiatives.
About EY
EY, a globally recognized professional services organization, is dedicated to building a better working world. With a presence in over 150 countries, EY provides diverse teams that deliver trust through assurance and help clients navigate complex issues across various domains, including tax, consulting, and strategy. Enabled by data and technology, EY’s approach is centered on asking better questions to find innovative solutions for the challenges faced today.
About IBM
IBM stands as a leader in global hybrid cloud, AI, and consulting expertise. Serving clients in more than 175 countries, IBM helps organizations harness insights from data, streamline business processes, and gain a competitive edge. IBM’s innovative contributions to AI, quantum computing, and industry-specific cloud solutions empower clients with open and flexible options. Committed to trust, transparency, and inclusivity, IBM continues to drive digital transformation across critical infrastructure sectors like financial services, telecommunications, and healthcare.
For more information on IBM’s initiatives and innovations, visit their official website at www.ibm.com.
Conclusion
The partnership between IBM and EY exemplifies the power of collaboration in driving transformative solutions for complex business challenges. By integrating cutting-edge AI technology with profound domain expertise, this alliance is poised to redefine tax compliance and elevate it to a strategic function within organizations. As the world of tax compliance evolves, the adoption of innovative solutions like EY.ai for tax sets a new standard for efficiency, accuracy, and trust in the industry.
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