AI is one of the key drivers of technological transformation, with a strong impact on almost all areas of social and economic life. The issue of its regulation and potential taxation is therefore becoming the subject of intense public debate. We take a look at current trends and how AI is being implemented in the field of tax auditing. Will this be a benchmark for future legislative and administrative solutions? Only time will tell.
What Poles think about AI taxation
Recent survey results[1] show that while the vast majority of us are in favour of legal regulation of AI, in addition, a fairly large percentage also support the concept of taxing the work done by artificial intelligence.
It is therefore worth looking at how AI systems are being used by tax administrations. For example, in tax audit processes.
Artificial intelligence in European tax administration
Leading European economies have for some time been actively using AI in tax administration. The most interesting solutions have emerged in Germany, France and Italy.[2]
Germany: A comprehensive approach to modernising tax processes
The amendment of the Tax Code (Gesetz zur Modernisierung des Besteuerungsverfarhens), introduced in 2017, has enabled the tax authorities to use AI in areas such as:
- Tax risk analysis and selection of entities for tax audit
- Verifying the compliance of tax returns with applicable regulations
- Automating the process of granting tax relief
In addition, AI assistants have been introduced in selected federal states to answer taxpayers’ questions on tax issues.
France: Advanced fraud detection
France issued a decree on fraud targeting and request evaluation (Ciblage de la Fraude et Valorisation des Requêtes) back in 2014.
The French system uses AI to:
- Select taxpayers for tax audits (Valorisation des requêtes)
- Identify links between entities potentially involved in tax fraud
Under Article 3 of the CFVR, AI is authorised to process a wide range of data, including:
- Information on the professional and economic situation of individuals
- Economic and financial data on companies, including VAT and income information
Italy: Comprehensive application of artificial intelligence in tax administration
In 2021, the Italian tax administration began implementing AI-based solutions, focusing on:
- Combating tax fraud
- Countering tax evasion
- Analysing the risk of fraud based on tax returns
- Supporting officials in administrative decision-making
In addition, as in Germany, an AI-based virtual tax assistance system has been implemented in Italy.
All these examples illustrate the growing trend towards the use of advanced technologies in tax administration. The incorporation of AI technologies aims to increase the efficiency of audit processes, minimise the risk of fraud and improve the quality of service to taxpayers.
Polish tax administration plans for AI
The Polish tax administration already has advanced digital tools, such as JPK_VAT (Standard Audit File for VAT), which is part of a broader strategy to digitise the tax administration.
Other systems, such as KSeF (National e-Invoice System) and JPK_CIT, are planned for implementation in the future. These solutions provide a solid technological base that can be effectively used for integration with artificial intelligence systems.
A key challenge in the process of implementing artificial intelligence in the Polish tax administration will be the development of appropriate procedures and supervision mechanisms.
It is important that in the initial phase of implementation, artificial intelligence is strictly controlled and its decisions are verified by experts. Such an approach will allow for the gradual improvement of algorithms and minimisation of the risk of errors.
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[1] https://businessinsider.com.pl/technologie/nowe-technologie/polacy-chca-opodatkowac-prace-wykonywane-przez-ai/6gymfvz
[2] Based on research by the University of Antwerp – AI TAXADMIN.
