AI agents are rapidly asserting their value in corporate tax, trade, legal and compliance functions, where they are gathering data, analyzing performance, offering recommendations, and executing tasks in ways that make them feel more like virtual assistants than software. With the agentic AI market topping $7.63 billion in 2025 and projected to hit $183 billion by 2033, it is a safe bet that AI agents will be a part of most professionals’ daily work routines in the near future, if they aren’t already.
As these agentic AI capabilities become more deeply ingrained in our everyday workflows, corporations may soon have to address the question: Will AI agents eventually be taxed like employees?
It’s not such a far-fetched concept. Throughout history, the forward march of technology has been met with equal zeal by creative tax authorities eager to find new sources of revenue. For evidence of this, look no further than the proliferation of digital services taxes (DSTs) being introduced in jurisdictions around the world. These taxes, which are levied on gross revenue from digital activity like online advertising, data sales, streaming and cloud-based software sales, can account for upwards of two-to-five percent of revenues from digital services. In the UK, where tax authorities implemented a 2% DST in 2020, tax authorities collected some £800 million in the 2024-2025 financial year.
Digital Taxes Create Controversy and Revenue
These digital taxes have stirred up a fair amount of negative sentiment and controversy. Canada recently passed DST legislation in 2024 only to rescind it in 2025 as part of its trade negotiations with the United States. India followed a similar path. Elsewhere in the world, however, dozens of countries including Austria, France, Italy, Spain, Nigeria and Nepal have all implemented some form of DST, unwilling to resist the significant revenue these taxes generate. The strategy has become so common that, EY’s recent survey of 1,934 senior tax executives found that DSTs have emerged as the top concern for future tax controversy.
Even local tax authorities have gotten in on the game. Chicago famously became the first major city to collect a tax on digital streaming video in 2015 when it extended its in-person amusement tax to include electronically delivered amusements, such as movies viewed at home on Netflix, Hulu and other streaming services. Quickly dubbed “The Netflix Tax,” the initiative drew widespread criticism and a high-profile legal challenge. But the law stood, and the tax now generates about $258 million a year in revenue for the city.
These are not new concepts. From telecommunications excise taxes to radio and television license fees to taxes on gasoline to road use fees for electric vehicles, tax authorities have a history of innovating to keep pace with new technologies new forms of consumer behavior. Following that logic, AI might just be the next frontier for a new category of corporate tax.
Defining the Real AI Value Equation
Whether increased use of AI ends up reducing employee headcounts or augmenting existing workforces with armies of digital helpers, the potential tax revenue implications are hard to ignore.
While no tax authorities have formally introduced a tax on AI agents yet, the loose idea of a “robot tax” has been around for a while. Nobel laureate Edmund Phelps teased the idea in a 2019 working paper and high-profile personalities ranging from Bill Gates to Sen. Bernie Sanders have discussed the idea of taxing robots and AI as a means of addressing potential economic changes introduced by automation.
Critics of those ideas have been quick to point out that taxing AI could stifle innovation. The International Monetary Fund, for example, wrote in a 2024 report that special taxes on AI would reduce the speed of AI investment and “are not recommended as they can be hard to operationalize and hamper productivity growth.” Instead, they suggest government authorities need to stay vigilant to monitor the longer-term implications of AI on a wide range of metrics, such as employment, wage growth, productivity, and corporate profits.
And that’s where corporate tax, trade, legal and compliance teams would be wise to start planning for a scenario in which increased reliance on technology could potentially influence corporate tax legislation in different jurisdictions.
As we head into a future where more of our day-to-day workloads are augmented by AI, it will be important to understand exactly how those changes are translating to productivity and professional growth. There will no doubt come a time in the not-so-distant future when business leaders will be called upon to demonstrate the real-world effects of their AI initiatives on everything from corporate profits to corporate headcounts. It will be important that they look beyond base-level productivity or efficiency metrics to illustrate how AI is creating new value. Quantifying that value and establishing the real ROI for investments in AI needs to start now.
AI is already having a profound effect on the way we work, and its influence will only grow more pronounced as technology continues to evolve. If we allow its value to be reduced to just hours gained or costs cut, don’t be surprised if it shows up in a tax proposal.
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