Transfer Pricing and Technological Advancements – Enabling future-readiness in Companies and Tax Administrations

It is beyond any question that automation and the introduction of new technologies is an imperative in Transfer Pricing for companies and tax administrations moving forward in a digitalized world. In today’s increasingly regulated tax and transfer pricing environment, technological advancements can help to ease and/or enhance TP compliance and transparency, reduce information asymmetries between taxpayers and tax authorities, enable more effective and efficient data analysis, transfer price calculation, TP decision-making and documentation.

In the 2024 Global TP Conference at WU Vienna, Niklas Schwemin , Iris Tschatsch , Richard Stern , Raffaele Petruzzi and me discussed opportunities and challenges for companies and tax administrations in that context. When technology implementation or automation projects are prepared by companies, decision makers need to think about the following aspects:

1)???? IT strategy- & IT infrastructure-fit

2)???? Make or buy decision and corresponding resource availability

3)???? Internal data security and compliance requirements

4)???? Data privacy and confidentiality

5)???? Training and employee up-skilling

While the first three items may summarised under the headline “strategy & IT-architecture,” the last two items are clearly linked to the “HR-perspective” of automation and innovative technology implementation in tax and TP. With a view to these five features, both companies and tax administrations will face similar challenges to a certain extent.

At the end of a lively discussion, panelists and the audience arrived at a mutual understanding:

The TP specialist of the future is not a machine! Technological advancements are not going to replace all jobs in Transfer Pricing. But they will for sure have an impact on work content features, the way of working, and the future cooperation of companies with tax authorities and within and among tax authorities themselves.

The panel was co-chaired by Raffaele Petruzzi and Richard Stern , while Christina Sudrat , Mara Schmid and the WU Teaching and Research Associates worked tirelessly behind the scenes or on stage to make this year's conference a great success again, after a highly thought-provoking ice-breaker kindly provided by Andrew Hickman and Shauna Pittman in their introductory lecture on Wednesday, February 21, i.e., "Is the Control of Risk Framework helping or harming Transactional Comparability?"