Ai Ideas for Accountants #2: Intra-group transaction contract builder

Ai Tools for Accountants #2 – Intra-Group Transaction Bot

Every accountant is familiar with intra-group transactions between group entities, be they the provision of services, equipment and/or property. Often these arrangements are informal with no written contract drawn up despite the genuine provision of goods, services and property. A worrying trend is the ATO insisting upon commercial, written contracts before deductions for intra-group transactions are allowed, as evidenced by the recent case S.N.A. Group Pty Ltd v Commissioner of Taxation [2025] FCA 240.

Cases such as S.N.A. Group prompted us to build an Intra-Group Transaction Bot using Ai models to allow a fast and cost-effective means of building a documentation trail to support the deduction of these intra-group transactions. Here’s how we went about it….

What is required to ensure intra-group transactions are deductible to the payer?

The S.N.A. Group Pty Ltd v Commissioner of Taxation [2025] FCA 240 was a win for the taxpayer, with the Federal Court allowing the deductibility of intra-group transactions despite the absence of what the Commissioner deemed sufficient documentation. The case confirms the following must exist for the deduction to stand:

1)      There must be a legal obligation to pay

2)      There must be a proven need for the thing as part of the business or income earning activities of the recipient

3)      The amount must be commercial.

Despite not have formal written contracts for all intra-group transactions, Logan J allowed the deductions as all three elements above were evident.

The purpose of an Intra-group Transaction Bot is to AVOID an S.N.A. Group type dispute in the first place, to build out with a click of a few buttons detailed written support for these previously informal arrangements. The Bot we built:

1)      Drafts a legal contract between the intra-group entities

2)      Obtains evidence of the need for the service, equipment or property in the hands of the recipient entity

3)      Confirms the commerciality of the value ascribed to the intra-group transaction through independent validation.

As Logan J said in the S.N.A. Group Case - "Perfection in documentation does not dictate eligibility". Yet an improvement in documentation can lead a smoother road through an ATO review or audit.

Which Ai model to use?

After testing various models and various prompts, we landed on Gemini 2.5 running as the engine for this Bot. Special mention goes to Grok 3 for its excellent work refining the prompt that proved most successful when fed into Gemini 2.5. Claude did well and so did Chat GPT, yet the new versions of Gemini and Grok continue to impress.

How long does the Intra-group Transaction Bot take?

Assuming you have the relevant input ready (e.g., description of the service, details of the equipment or property being provided) the Bot will draft a contract in 45-60 seconds.

If you would like full, free, no obligation trial of an Ai platform designed from the bottom-up for Australian accountants with an Intra-Group Transaction Bot (and dozens of others), please contact us at info@elfworks.ai or phone me on 0418 902 440.

Thank you for reading. Next blog I’ll take a look at Ai Tools for Accountants #3 – Simple Trust Resolution Drafting tool.

Please click here for Elfworks pricing information.