Artificial Intelligence in Tax Law: Balancing the Fight Against Tax Evasion and Taxpayer Data Protection

Tax law, due to its increasingly mechanistic evolution and the vast quantity of data collected from diverse sources, lends itself perfectly to the application of artificial intelligence (AI). Its impact can be observed along three key dimensions: taxation, the relationship between tax authorities and taxpayers, and legal proceedings. With the enactment of Delegated Law No. 111/2023, the legislator has clearly and decisively charted a course for the extensive use of AI by tax authorities, assigning it a central role in combating tax evasion and avoidance, and enhancing the quality of audits to identify high-risk taxpayers more effectively. It is worth noting how this development has undeniably increased the use of data, which holds a dual nature: on one hand, data is a legal asset to which an economic value is attributed; on the other, from a tax perspective, it represents the raw material for the “extractive industries” of the 21st century. This leads us to analyse how the vast amounts of personal data and information at the disposal of tax authorities, can on the one hand make more precise and effective audits possible, but at the same time it raises critical questions about the proper balance between the right to taxpayer data protection and the need to combat tax evasion. Moreover, it necessitates an examination of the limitations and opportunities tied to such usage, considering the transition from a traditional tax system to a post-modern one that respects fundamental legal principles.