For tax authorities and even taxpayers, AI promises to make lives easier. At the same time, it carries risks that “cannot be taken out of the system.” Dr. Stephen Daly, reader in tax law at King's College London, describes this dynamic in a conversation with Skadden partners David Farhat and Eric Sensenbrenner, associate Stefane Victor and senior advisor De Lon Harris. The panel explores the best and worst of the impact of AI in the tax world. Tune in for insights about what AI means for taxpayers and tax authorities alike.

Name: Dr. Stephen Daly

What he does: Dr. Daly teaches tax law to undergraduate students (International and Corporate Taxation) and postgraduate students (Tax Administration, Procedure and Dispute Resolution and EU Tax Law). His research focuses on administrative law, technical tax law and EU law.

Organization: Kings College London

Words of wisdom: “To embrace the capabilities of AI, you need to accept that mistakes will be made. So in the case of a chatbot, if a chatbot gets the answer wrong and a taxpayer ends up underpaying their taxes, well then you just leave them off the hook.”

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☑️ Let us know what topics you would like to hear about on GILTI Conscience by emailing our executive producer at eman.cuyler@skadden.com.

GILTI Conscience is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. Skadden’s tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing transactional, planning, and controversy challenges. The insights and views presented in GILTI Conscience are for general information purposes only and should not be taken as legal advice for any individual case or situation. The information presented is not a substitute for consulting with an attorney, nor does tuning into this podcast constitute an attorney-client relationship of any kind.

Changes in the luxury fashion industry are reshaping transfer pricing considerations, says Giuseppe Abatista vice president at Banca Popolare di Puglia e Basilicata. In this conversation with Skadden tax partner David Farhat and associate Stefane Victor, Giuseppe shares his insights about how price increases, supply chain centralization and tariff uncertainties are creating new transfer pricing complexities in an industry known for high profitability and strong IP.

Name: Giuseppe Abatista

What he does: Giuseppe is a tax lawyer and vice president at Banca Popolare di Puglia e Basilicata, a bank founded in the 19th century and present in 10 Italian regions. He is also a group tax consultant for luxury fashion brand Salvatore Ferragamo.

Organization: Banca Popolare di Puglia e Basilicata

Words of Wisdom: “The main markets are high-taxing jurisdictions. U.S. usually is the first market for all brands. China tends to be the second one. Japan, by the way, is very strong right now basically due to an explosion in tourism, also driven by currency, because the yen is not strong.”

Connect: LinkedIn

☑️ Follow us on X and LinkedIn.

☑️ Subscribe to GILTI Conscience on Apple Podcasts, Spotify, or your favorite podcast app.

☑️ Let us know what topics you would like to hear about on GILTI Conscience by emailing our executive producer at eman.cuyler@skadden.com.

GILTI Conscience is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. Skadden’s tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing transactional, planning, and controversy challenges. The insights and views presented in GILTI Conscience are for general information purposes only and should not be taken as legal advice for any individual case or situation. The information presented is not a substitute for consulting with an attorney, nor does tuning into this podcast constitute an attorney-client relationship of any kind.

Machado Meyer tax partner Fernando Colucci joins Skadden’s David Farhat, Loren Ponds, Eman Cuyler and Stefane Victor to explore Brazil's historic shift from a 27-year formulaic transfer pricing system to full OECD compliance. As he explains, “We moved from a very strict, very formulaic approach to a simple, a direct import of the arm's-length principle.” Tune in for his insights on dramatic changes facing multinational enterprises and Brazil's notorious 75% penalty system that raises the stakes on compliance decisions.

Top takeaways from this episode

• The Formula-to-Function Flip: Brazil abandoned 27 years of fixed profit margins in favor of the full OECD arm's-length principle, requiring companies to conduct detailed functional analyses for the first time.
• All-or-Nothing Penalties: Brazil's unique 75% penalty system creates stark choices: Accept the tax authority's adjustment with no penalty or challenge it and face penalties on any sustained portion.
• Intangibles Enter the Game: Previously excluded from transfer pricing rules, intangible transactions are now subject to OECD guidelines, creating new compliance challenges.
• Limited Relief Mechanisms: While Brazil introduced its first APA program, it operates more like a written consultation process than traditional APAs, and the country has never executed a MAP case despite having treaty provisions.

Name: Fernando Colucci

What he does: Fernando provides legal and tax assistance in M&A operations, restructurings, international taxation, international treaties, transfer pricing, tax planning, international investments taxation, asset and succession planning.

Organization: Machado Meyer

Words of wisdom: “My recommendation here is to start with a thorough risk assessment. So, understand your intercompany transactions, identify potential areas of concern. Getting prepared, that's the motive.”

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