EY 2025 Tax Risk and Controversy Survey: Tax leaders turn to AI to strengthen tax management as new risks loom

• 87% of tax leaders say AI will improve efficiency and accuracy.
• 70% of tax leaders have already implemented or are integrating at least one GenAI tool for tax controversy management.
• Stronger frameworks identified as essential, with 91% planning to enhance their governance strategies.

As multinational companies navigate an increasingly complex business world, the EY 2025 Tax Risk and Controversy Survey highlights how tax leaders are turning to generative artificial intelligence (GenAI) and reviewing their governance frameworks to manage emerging tax risks. With nine in 10 (90%) tax leader respondents expecting more tax disputes in the coming years, they are proactively seeking innovative solutions to set their organization up for success.

The survey, which gathered insights from nearly 2,000 senior tax executives worldwide, underscores the challenges posed by global tax reform, heightened transparency, new technology and rapidly evolving regulations. The findings indicate that GenAI is emerging as a transformative tool for tax risk management and controversy resolution.

GenAI is reshaping how businesses manage tax disputes

GenAI is rapidly becoming integral to tax risk management, with 87% of respondents expecting improvements in the efficiency and accuracy of tax audits and dispute resolutions. However, new pressure points emerge almost daily, both in terms of the volume of controversy and the length of time it takes to settle disputes.

Seventy percent of tax leaders surveyed have already implemented or are in the process of integrating at least one GenAI tool focused on tax controversy management.

Those who utilize AI tools report significantly higher levels of satisfaction with their tax controversy management approaches, with 46% of respondents expressing that they are "very satisfied" compared with just 31% of non-AI users.

Luis Coronado, EY Global Tax Controversy Leader, says:

“AI is transforming not just how tax teams work but how they build and reinforce trust with tax authorities. The shift from reactive to real-time engagement is helping both sides move from interpretation to collaboration – bringing greater accuracy, transparency and efficiency.”

Businesses brace for rising disputes amid BEPS 2.0 and digital tax reform

Despite the promise of technology, the potential for disputes continues to escalate. Ninety-two percent of executives surveyed expect more disputes arising from the OECD’s base erosion and profit shifting (BEPS) Pillar Two, and 91% are concerned about unresolved issues related to Pillar One Amount A.

Additionally, 90% anticipate increased tax controversy from transfer pricing and transparency obligations, such as public country-by-country reporting.

Digital services taxes have emerged as a significant source of future tax risk, yet only 49% of respondents feel "highly prepared" to manage the anticipated surge of disputes.

Coronado says: “Tax controversy is changing shape. New rules, new reporting and new transparency requirements mean the number of disputes is almost certain to rise. Organizations investing early in technology and talent will be best placed to stay ahead of and keep up with this rising wave of tax controversy.”

Stronger tax governance fuels future confidence

As tax risks increase, strong governance is becoming the cornerstone of effective controversy management. While 91% of respondents plan to enhance their focus on global tax governance, only 31% are "very satisfied" with their current management of controversy.

Bridging the gap between intention and execution is critical, with leading tax functions establishing clear leadership structures, centralizing oversight of global disputes and strengthening data governance.

Joel Cooper, EY Global International Tax and Transactions Services Controversy Leader, says: 

“In today’s environment, governance isn’t just a compliance exercise, it’s a strategic advantage. Companies that effectively combine clear governance with modern technology, empowered talent and a robust data strategy will manage tax controversy from a position of confidence, not crisis.”

For more on the report, please visit: EY 2025 Tax Risk and Controversy survey

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