In a bold move that could redefine the tax compliance landscape, IBM and the EY organization have unveiled a suite of artificial intelligence-powered solutions aimed at transforming how businesses manage their tax obligations.
Announced on May 1, 2025, this collaboration leverages IBM’s cutting-edge AI technology, watsonx, and EY’s extensive domain expertise to create EY.ai for tax—an innovative approach that promises to enhance efficiency and accuracy in tax compliance processes across the globe.
In recent years, the world of tax compliance has become increasingly complex, with companies facing a myriad of challenges including limited resources, multiple enterprise resource planning (ERP) systems, talent shortages, and ever-evolving regulations.
IBM and EY’s latest partnership addresses these hurdles head-on by offering generative AI solutions that not only streamline workflows but also elevate the role of tax departments from mere administrative functions to strategic value creators within businesses.
At the heart of this initiative are three pioneering AI-enabled tax solutions.
The first, the Intelligent Tax Data Lake, uses IBM watsonx.data and watsonx.ai, along with open-source models, to gather and consolidate transaction data from multiple sources for tax filings.
This solution is already making waves in IBM’s own tax department, automating the consolidation of data from 36 sources and enhancing data quality through built-in controls and reconciliation checkpoints.
The second solution, Detect and Correct with Business Documents, employs IBM’s open-source toolkit Docling to extract and correct data from unstructured invoices.
By automating what was previously a manual process, this solution enables IBM to significantly increase the volume of documents it reviews for tax determinations and filings, thereby reducing errors and saving valuable time.
The third innovation, Withholding Tax Determinations, automates the monthly process of determining the correct withholding tax rate for individual transactions.
This solution allows IBM tax professionals to quickly and accurately evaluate thousands of intercompany transactions, showcasing the transformative potential of AI in tax compliance.
These solutions, already in use by IBM’s Tax Department, are expected to save tens of thousands of hours annually, propelling IBM closer to its ambitious goal of automating 80% of its foreign tax compliance.
The emphasis on security and trust ensures that sensitive tax data is safeguarded, mitigating the risk of costly penalties and reputational damage.
IBM’s Vice President and Chief Tax Officer, Kanthi Morrissey, highlighted the impact of the collaboration, stating, “We manage massive volumes of granular data from disparate sources to file thousands of tax returns across hundreds of legal entities worldwide.
By combining EY domain expertise in tax and IBM’s AI technology, we were able to transform the way our tax department handles global tax compliance, freeing up the team to focus on more strategic work.”
The announcement signifies more than just a technological advancement; it represents a paradigm shift in how businesses perceive and manage tax compliance.
By integrating AI into the core of tax processes, IBM and EY are not only addressing current challenges but are also setting a precedent for future innovations in the field.
This partnership also reflects a broader trend in the business world where AI is increasingly seen as a tool for creating value rather than just a means to cut costs.
As companies continue to navigate the complexities of global tax regulations, the ability to automate and streamline processes will be crucial for maintaining competitiveness and compliance.
Looking ahead, IBM and EY are committed to further enhancing these solutions and expanding their application to other tax processes.
This forward-thinking approach suggests a future where AI-driven tax compliance is not just a possibility but a standard practice for businesses worldwide.
In a rapidly evolving business environment, the collaboration between IBM and EY stands as a testament to the power of innovation and partnership.
As they continue to push the boundaries of what is possible with AI, one thing is clear: the future of tax compliance is here, and it is smarter, faster, and more efficient than ever before.
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