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.

Romania, transfer pricing remains the main area of tax risk. Multinational companies need to adopt digital solutions, monitor data, and anticipate authorities' analyses. Proactive preparation can turn tax compliance into a strategic advantage.”

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.

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.

About the study

The 2025 EY Tax Risk and Controversy survey included 1,934 senior professionals in roles such as Global Tax Director, Global Head of Tax or VP of Tax, Regional Tax Director, Country Head of Tax, Functional Tax Head, Finance Director, General Counsel, and members of the C-suite. It covered 12 industries across 48 jurisdictions.

The survey was distributed via a web-survey instrument and collected responses in the first quarter of 2025. The survey included those working in organizations in a range of industries with global gross revenues of at least US$500 million.