General-Purpose AI Tools for Transfer Pricing in 2025General-Purpose AI Tools for Transfer Pricing in 2025
Learn how general-purpose AI tools like ChatGPT, Claude, and Gemini can be leveraged to streamline transfer pricing workflows, improve documentation, and enhance compliance processes.
Borys UlanenkoCEO of ArmsLength AI
Sven van der HeideCPO of ArmsLength AI
60min webinar
Contents↓
Contents
TL;DR - Key Takeaways
General-purpose AI tools can help with drafting transfer pricing documentation and policies
AI assistants can quickly analyze complex regulations and provide summaries relevant to your situation
Prompt engineering is essential for getting the most valuable outputs from AI tools
Current limitations include hallucinations and lack of specialized transfer pricing training
General Purpose AI Tools for Transfer Pricing: A Complete Guide from ArmsLength AI
Meet the Transfer Pricing AI Experts
Borys and Sven from ArmsLength AI shared their deep expertise on using AI tools for transfer pricing work during a comprehensive webinar.
Borys founded ArmsLength AI after 12 years in transfer pricing. His background includes valuable experience at the Big Four and as a global transfer pricing manager at Royal Dutch Shell.
Sven joined as co-founder, bringing 8 years of Big Four experience where he specialized in data analytics solutions for multinational companies.
ArmsLength AI: Transforming Transfer Pricing with Technology
ArmsLength AI merges deep transfer pricing expertise with cutting-edge artificial intelligence. Their main product is an AI-powered platform specifically built for transfer pricing benchmarking studies.
This platform drastically reduces the time needed for comparability analyses by examining hundreds of potential comparables in just minutes.
The result? More comprehensive documentation and a robust audit trail that helps defend benchmarks during tax authority challenges or client inquiries.
Understanding Large Language Models for Transfer Pricing
Large Language Models (LLMs) form the backbone of modern AI tools. These systems train on enormous datasets—essentially the entire internet—to recognize patterns in language.
This training enables them to:
Categorize text effectively
Create accurate summaries
Generate natural-sounding content
Analyze sentiment and tone
Process complex information
Note
A critical limitation to remember: LLMs only contain information up to their training cutoff date. You must provide context for more recent developments.
The latest models from OpenAI (GPT-4.5 and O3), Claude, and Deepseek now tackle tasks that previously required human expertise. They feature:
Sophisticated reasoning capabilities
Integrated web search functions
Structured project management tools
In-depth research capabilities
Three Essential AI Tools for Transfer Pricing Professionals
1. Perplexity: Enhanced Web Search for Tax Information
Perplexity functions like an AI-enhanced search engine, quickly finding and summarizing web information—perfect for factual transfer pricing questions.
During the demonstration, Borys and Sven tested it with Polish transfer pricing deadlines for 2025. Perplexity accurately reported:
Documentation preparation deadlines (end of 10th month after tax year)
TPR filing deadlines (end of 11th month after tax year)
Requirements for master file submission
Response times for tax authority requests
However, several limitations became apparent:
Results depend on online sources that may contain outdated regulations
The tool often prioritizes secondary sources (advisor summaries) over primary legislation
Query language significantly affects results (English vs. local language)
Directing the search toward authoritative sources proves challenging
Cross-verification remains necessary for critical compliance information
2. ChatGPT Projects: Standardizing Transfer Pricing Workflows
ChatGPT Projects enables transfer pricing professionals to create standardized workflows with consistent instructions for repetitive tasks.
The detailed demonstration showed how to create a functional analysis project by:
Setting up a new project with comprehensive instructions about structure and requirements
Uploading reference libraries containing functions, assets, risks, and functional profiles
Providing specific format requirements to ensure consistent output across analyses
Testing the system with a real distribution agreement between Altera and Aero Asia
Key point
The system successfully:
Correctly identified both entities in the transaction
Performed thorough analysis of functions, assets, and risks for each party
Assigned appropriate entity characterizations (fully-fledged manufacturer/principal for one entity, fully-fledged distributor for the other)
Generated relevant follow-up questions for further clarification
Created a summary table organizing all functions, assets, and risks by entity
This approach works particularly well for standardized transfer pricing documentation components like functional analyses, industry overviews, and company profiles.
3. ChatGPT Deep Research: Comprehensive Analysis for Transfer Pricing
Deep Research represents the most powerful recent development in LLMs for transfer pricing work. The tool conducts extensive research by:
Performing multiple web searches on related topics
Analyzing numerous sources for relevance and reliability
Generating follow-up questions to fill information gaps
Creating detailed reports with comprehensive source attribution
While taking 3-20 minutes to complete, Deep Research delivers extensive analysis that would take hours or days manually.
First demonstration: European car paints market analysis (2025)
The system began by asking clarifying questions about market segments and focus areas
It produced an 8-page detailed report covering:
Market size and growth projections
Regulatory frameworks across European countries
Consumer and industry demand patterns
Competitive landscape with key players
Market trends and future outlook
Each section included supporting sources for verification
Second demonstration: Transfer pricing disputes involving contract manufacturers
Identified significant cases globally, including:
US Coca-Cola's foreign supply point manufacturers case
Medtronic's Puerto Rican manufacturing arrangements
Several Indian transfer pricing cases involving manufacturing
Provided detailed summaries of tax authority positions and taxpayer arguments
Outlined practical implications for contract manufacturers in similar situations
Borys highlighted that Deep Research consistently uncovers connections and insights that even experienced transfer pricing professionals might overlook, though result quality depends on how well cases are documented online.
Current Limitations of AI for Transfer Pricing Benchmarking
Warning
Despite impressive capabilities in other areas, testing revealed significant shortcomings when using general AI tools for benchmarking studies:
The process requires manual copy-pasting information for hundreds of potential comparable companies
AI tools typically analyze only homepage content rather than comprehensive website information
Critical independence information (foreign offices, group affiliations, related parties) is frequently missed
The analysis lacks proper documentation needed for tax authority defense
Time savings compared to manual methods proved minimal in testing
The demonstrators concluded that current general-purpose AI tools remain ineffective for benchmarking studies compared to specialized solutions like the ArmsLength AI platform, which addresses these specific challenges.
Practical Applications for Transfer Pricing Professionals
Transfer pricing professionals can immediately apply these tools for:
Creating structured functional analyses for intercompany transactions
Developing comprehensive industry overviews for documentation
Analyzing recent transfer pricing cases for planning purposes
Preparing initial drafts of transfer pricing documentation
Creating questionnaires for functional interviews
For benchmarking activities, specialized tools like ArmsLength AI remain necessary due to the specific requirements of comparable company analysis.
Future Outlook for AI in Transfer Pricing
The rapid development of AI tools suggests further improvements in capability and accuracy. Transfer pricing professionals should:
Experiment with emerging features, especially Deep Research
Stay informed about new AI developments relevant to tax work
Consider how AI tools can complement rather than replace professional judgment
Be aware of limitations when relying on AI-generated content for compliance purposes
Tip
The webinar concluded that while general-purpose AI tools offer substantial value for transfer pricing professionals in many areas, specialized AI solutions remain essential for complex tasks like benchmarking studies.
Related Resources
Want to learn more about transfer pricing and AI? Explore these related articles and resources:
Borys UlanenkoCEO of ArmsLength AI
Sven van der HeideCPO of ArmsLength AI