Generative artificial intelligence (gen AI) has the potential to reshape the talent mobility industry in several ways, including through improvements to tax compliance processes. AI can, for example, make year-to-year comparisons easier by improving the quality of queries from source systems, notes Ernst & Young. It can also convert and consolidate data from various file formats. Both functions can help tax professionals shift their attention to work that requires a personal touch. Beyond these time-saving benefits, AI also has the potential to identify areas of data irregularities and potential risk, thus augmenting those time-intensive tasks.
“AI is transforming how tax professionals help manage global mobility programs by automating routine tasks and enhancing efficiency,” says Craig Dexheimer, chief operating officer and data privacy and security officer at Global Tax Network (GTN). “By reducing manual data entry and streamlining compliance processes, AI tools free up tax professionals to focus on higher-value activities such as analyzing complex tax positions and assessing compliance risks.”
Rajiv Thadani, principal at KPMG LLP – Global Mobility Services and incoming WERC board member, adds, “By leveraging AI, global mobility programs should be able to access complex regulatory information more efficiently, should expect streamlined tax compliance processes for employees, and will have more options for deploying tax compliance solutions for differing employee profiles.”
Aiding Cross-Border Compliance
The ever-changing global landscape of tax compliance requires a keen eye and mind. Gen AI can automate some of the tracking, freeing up tax professionals for the important analysis of what the changes actually mean for their companies. Thadani points to AI’s ability to configure varying types of data inputs and insights for different audiences. “By handling complex data tasks and adapting to various country regulations, AI can help reduce errors and be adapted quickly for changes in tax laws,” he says.
AI’s translation capability also comes in handy, notes Dexheimer, allowing tax professionals to more efficiently review documents and correspondence in multiple languages. This capability benefits relocated employees, for example, by allowing them to communicate with their tax team in their native language.
AI’s Role in Risk Mitigation
For companies that have employees and operations spanning multiple countries, staying on top of tax changes can be complicated, but it’s a task AI is cut out for. The technology is capable of intense analysis of vast amounts of data. It can continuously monitor tax regulations across a limitless number of jurisdictions. Feed it with the movement of employees, point it in the right direction, and let it do the rest, with tax professionals looking over its shoulder to make sure it remains on task.
AI can identify patterns and anomalies, says Thadani, and provide real-time risk assessments. It can also be used to benchmark risk profiles and compliance practices against industry standards. Dexheimer notes that AI is particularly useful in the post-pandemic world, where companies face the additional challenge of tracking remote employees to ensure their locations or duration of stay do not trigger tax obligations or compliance requirements that otherwise may be missed.
The Importance of a Tax Pro in the Loop
While AI can greatly reduce the risk of errors that may arise from typos or missing data, it is still prone to error and thus requires human oversight from a tax professional. “The complexity of tax law, the need for nuanced interpretation, and the potential for AI to produce incorrect guidance make human oversight essential,” Dexheimer says. “Tax professionals must carefully review and validate all AI outputs to ensure accuracy and compliance with current tax regulations. The optimal approach combines AI’s efficiency with the expertise and judgment of experienced tax professionals.”
These words of advice are especially relevant when it comes to tracking changes in tax law. Dexheimer recounts the case of a GTN tax team member who asked ChatGPT to summarize an article of the United States/Canada tax treaty. Questioning revealed that the tool was likely sourcing details based on an old version of the treaty for its summary.
Ensuring Privacy in the Age of AI
Sometimes it seems that AI has no bounds, with privacy being top of mind as this technology is still in its Wild West era. Companies and celebrities have been forced to explicitly demand their data remain off-limits. But what about an employee being relocated or working for a mobility company? What recourse do they have?
Thadani says that companies can enshrine data privacy by ensuring that their AI solutions have security protocols in place and that the use of sensitive data is configurable and transparent. Policies regarding the storage and disclosure of employee data must be clearly stated and understood.
KPMG’s LINK Go global mobility platform, for example, offers complete control over where and when employee data is used for AI solutions. It also ensures that data accessed by AI is not sent back or stored within AI models or used for training.
The Future of AI in Tax Compliance
The limits of AI are yet to be known, with even experts debating it. But Dexheimer and Thadani agree that the technology has more in store for tax compliance. The process will be more like an evolution than a revolution. “AI adoption for tax compliance will likely start small with a focus on enhancing existing processes and bringing complex tax knowledge into the hands of global mobility programs and employees more easily,” Thadani says. “This will start with specific, focused areas within the tax compliance process behind the scenes but will eventually move into more and more areas as use cases are tested and capabilities expand.”
Both see AI as a tool to help tax professionals, not replace them. “While AI will continue to advance and streamline processes, human oversight will remain essential for reviewing and validating AI-generated information,” Dexheimer says. “Global mobility programs particularly benefit from this balanced approach—while clients expect AI-enhanced technology solutions, they also value the trusted guidance and human connection that tax professionals provide.”