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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 organisations up for success.
The survey, which gathered insights from nearly 2,000 senior tax executives from around the globe, 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.
With 87% of respondents expecting improvements in the efficiency and accuracy of tax audits and dispute resolutions, it is clear that GenAI is rapidly becoming integral to tax risk management, 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 utilise 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.
“AI is transforming not just how tax teams work but how they build and reinforce trust with tax authorities,” says Luis Coronado, EY Global Tax Controversy Leader. “The shift from reactive to real-time engagement is helping both sides move from interpretation to collaboration, bringing greater accuracy, transparency and efficiency.”
Despite the promise of technology, the potential for disputes continues to escalate. Ninety-two percent of executives surveyed expect more disputes arising from 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.
“Tax controversy is changing shape. New rules, new reporting and new transparency requirements mean the number of disputes is almost certain to rise. Organisations investing early in technology and talent will be best placed to stay ahead of and keep up with this rising wave of tax controversy,” says Mr Coronado.
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, centralising oversight of global disputes and strengthening data governance.
“In today’s environment, governance isn’t just a compliance exercise, it’s a strategic advantage,” Joel Cooper, EY Global International Tax and Transactions Services Controversy Leader, points out. “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.”
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