Helps multinationals comply with BEPS 2.0 and other global tax regulatory changes
Enables expedited transfer pricing benchmarking; tax strategy optimization
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New York, New York–(Newsfile Corp. – February 21, 2024) – As multinational enterprises (MNEs) grapple with the compliance burden of an increasingly complex international tax regime, especially with the recent implementation of the OECD’s BEPS Pillar Two, adhering to transfer pricing requirements has become more critical than ever. KPMG LLP, the audit, tax and advisory firm, is using its newly awarded US Patent No. 11,720,842, “System and Method for Identifying Comparables” (the ‘842 Patent), together with artificial intelligence (AI), to help companies remain compliant and ultimately protect them from potential tax audits.
Transfer pricing benchmarking is a critical step in helping MNEs comply with transfer pricing rules and regulations – one that includes the review of hundreds of business descriptions and financial statements to compile a list of companies with comparable sets of data. The KPMG patent enhances this historically tedious and error-prone process by leveraging AI to automate and mine the data, reducing the number of discrepancies, tax authority audits, controversies and potential fines. The patent will also help companies with tax planning purposes related to Pillar Two, allowing them to identify areas where changes can be made to optimize their tax strategy accordingly.
About the patent:
Reviews hundreds of business descriptions and financial statements
Leverages machine-learning to accurately and consistently identify comparable companies for transfer pricing-related applications, including compliance, planning, and value chain analysis
Uses proprietary models to automatically rank the likelihood of possible matches and generates a similarity score of potential comparable entities
Provides enterprise-level strategic insights, including recommendations to accept or reject the potential comparable entity along with justification to substantiate the analysis.
The patent is a component of the firm’s cloud-based, AI-backed KPMG tpEngineTM – Comparables Insights tool, which sits on KPMG Digital Gateway – a Microsoft Azure-powered platform that equips tax departments with a one-stop-shop to KPMG tax technology solutions.
Quotes:
“In today’s rapidly evolving tax regulatory environment, taking a data-driven approach to transfer pricing compliance requirements is critically important to help companies steer clear of unnecessary and potentially costly tax audits,” said Thomas Herr, principal – Tax, Economic & Valuation Services, KPMG LLP. “Our patent within the KPMG tpEngineTM – Comparables Insights tool positions us as best-in-class advisors for multinationals on their worldwide intra-company transactions.”
“When it comes to leveraging secure AI and cloud-based services to better serve our clients, our foot is on the gas pedal,” said Rema Serafi, Vice Chair – Tax, KPMG LLP. “We remain committed to making outsized investments in technology and innovation to help our clients tackle the challenges of today’s complex regulatory landscape.”
About KPMG LLP
KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global organization operates in 143 countries and territories and has more than 265,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
KPMG is widely recognized for being a great place to work and build a career. Our people share a sense of purpose in the work we do, and a strong commitment to community service, inclusion and diversity and eradicating childhood illiteracy. Learn more at www.kpmg.com/us.
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Media Contact
Erica Lee
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