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AI for Chartered Accountants AI in CA Practices

Pillar Two AI Bot for Tax Research and Drafting Advice

Author: CA. Sunny Kishore Bilaney

Tools Used

Pillar Two AI Bot

Use Case Video - https://www.youtube.com/watch?v=7FrwVhLJU4s

Capsule Summary

Pillar Two, a recent international tax reform, has a complex set of rules intertwined with other disciplines like financial accounting, transfer pricing, double tax treaties, and domestic corporate tax laws. Further, 138 countries have adopted or agreed to adopt Pillar Two rules, resulting in a complex web of regulations. Conducting thorough research and advising a client requires tireless reading and interpreting thousands of pages of complex legal text.  To address this issue, the Pillar Two AI bot was developed to undertake quick and accurate research in a matter of a few seconds. Further, the AI bot has the persona of an International Tax Professional and is designed to provide accurate advice to client queries.

Pillar Two AI Bot for Tax Research and Drafting Advice

Pillar Two AI Bot is a Retrieval-Augmented Generation (‘RAG’)- based solution built using the CustomGPT tool. As an RAG-based solution, it enables users to create their own knowledge/ data source and combine it with large language models (LLMs), like GPT-4 Turbo, in the case of Pillar Two AI Bot. Thus, Pillar Two AI Bot is trained on authoritative and legitimate data sources, ensuring accurate, reliable and transparent responses.

The Pillar Two AI bot is developed to undertake research on Pillar Two, one of the topics of international tax. However, the underlying technology can be used in any other subject. In a nutshell, to build a bot:

  1. First use any RAG-based solutions/ tools like CustomGTP, WatsonX, OpenAI GPT-4, etc.

  1. Once the tool is chosen, the next step is to create a data/ knowledge warehouse. To be accurate, use authoritative data/ material and keep it up to date. For instance, Pillar Two AI Bot used authoritative material published by OECD.

  1. Next, you need to create a bot persona. Persona is about how you want the bot to behave and respond. For instance, Pillar Two AI Bot has the persona of an International Tax Professional.

  1. Finally, start asking questions, train and tune it to give you the expected response.

Tax research, particularly Pillar Two-related research, is a complex and time-consuming task. Further, it is not a mundane activity. It requires the application of the mind to interpret rules in order to do accurate research. With the help of Pillar Two AI Bot, research can be done quickly, accurately and transparently with citations to all the source documents along with links to the relevant documents for deeper research (if required). Further, the Pillar Two AI Bot understands the context of the query/ question and drafts accurate advice. This helps tax professionals to be 100% sure that they have not missed any data point in their research and that the advice drafted by the bot is after taking into consideration all the aspects relevant to the query/ question. Further, all this is achieved in a matter of a few seconds, which saves significant time. Thus, AI has a profound impact on Pillar Two research, and it can be easily replicated across other subjects like GST, Income-tax, Accounting Standards, etc.