AI literacy in tax practice: prompting is now a must

Tax advisory practice faces a historic shift: alongside the thousands of tax advisers, tax specialists and accountants in the Netherlands, countless AI assistants such as ChatGPT, Copilot and Perplexity are this year active in day-to-day tax work. With the EU AI Act taking effect on 2 February 2025, this development gains a new dimension. While many firms are still wrestling with ethical questions or limiting themselves to basic uses of Microsoft Copilot, they risk missing a crucial development: from early 2025, concrete requirements apply to the AI literacy of professionals who work with AI systems. Instructing AI tools effectively (“prompting”) thus becomes not only a practical necessity but also a legal obligation for the modern tax adviser, no less fundamental than analysing legislation, preparing returns or writing tax opinions. Because the AI Act is EU law, the same applies to tax practices in Belgium and Luxembourg.

Two tax advisers studying the new AI literacy obligations, made with AI

The new dimension of tax expertise

This development requires more than superficial computer skills. It calls for a considered combination of tax expertise, systematic thinking and AI awareness. Firms that invest now in solid AI training teach their advisers to write structured prompts. Take a tax adviser reviewing a holding structure, who asks an AI tool to assess: “1) options for applying the participation exemption under the amended Article 13 of the Dutch Corporate Income Tax Act 1969, 2) the impact of the new substance requirements from the 2025 Tax Plan, 3) risks relating to anti-abuse provisions in recent case law of the Court of Justice of the EU, and 4) relevant Dutch Supreme Court (Hoge Raad) decisions since 2023 on comparable structures.” A structured prompt like this produces a usable first analysis that still needs technical tax fine-tuning, but speeds up the process considerably. That is what AI literacy in tax practice comes down to: prompting is becoming a practical necessity.

Practical applications and organisational responsibility

The EU AI Act requires organisations to ensure, “to their best extent”, a sufficient level of AI literacy among staff who use AI systems. For tax advisory firms this is a concrete mandate to develop AI training programmes, introduce quality checks and draw up ethical guidelines. These requirements apply to all AI systems, regardless of their risk level.

When drafting tax analyses, a well-formulated prompt can serve as the starting point for a first draft that brings in relevant legislation, policy and case law. For tax research, advisers can instruct AI tools to analyse large volumes of rulings and case law for specific developments or differences in interpretation. When reviewing returns, AI can help identify risks and inconsistencies. These applications do not replace the tax adviser’s work, but they enrich the tax workflow in ways that were previously unthinkable.

Reorganising tax practice

Bringing AI into modern tax practice, combined with the requirements of the EU AI Act, calls for a fundamental redesign of work processes. Tax advisory firms need to redesign their workflows around AI-supported processes, with quality checks and ethical considerations built in. That means investing in:

• Ongoing AI literacy training and education for tax advisers and support staff
• Best practices for different types of tax work
• Quality checks for AI-generated tax analyses and opinions
• Drawing up and enforcing ethical guidelines for AI use in a tax context
• A culture that encourages sharing knowledge about effective prompting strategies for tax work
• Regular evaluation of AI competences within the organisation

Two accountants preparing for the new era, generated with AI

A new era for tax advisory practice

The urgency for tax practices to embrace this development can hardly be overstated. Developments in AI systems follow each other at high speed, while the law sets concrete requirements for AI literacy. Firms that do not act now risk both an unbridgeable gap and possible sanctions under the EU AI Act.

The future of tax services lies in integrating AI effectively and responsibly as a complement to tax expertise, not as a replacement for it. The tax adviser of the future needs to be not only technically strong in tax, but also AI-capable: able to tackle complex tax questions with a combination of human expertise and AI support. This new reality calls for tax specialists who understand both the technical and ethical sides of AI and can apply that knowledge effectively in their daily practice.

Firms that invest now in AI literacy and prompting skills are building not only compliance with the EU AI Act, but also their competitive position in a changing tax advisory market. In modern tax practice, more than ever: those who prompt, stay.