• Managing operational tax risk: survey highlights

    Finding the right people, processes and technology to manage record-to-report risks is no easy task. To consider how, see our survey’s leading practices.

  • Building a tax manifesto for manufacturing

    The global re-shoring trend is creating new opportunities for the UK, but our report shows it has limited time to set itself up for future high quality manufacturing.

  • Tax Insights (previously T Magazine): future of tax

    Whether it’s the media, politicians or corporations, everyone is becoming increasingly focused on tax. Don’t miss our eleventh edition, which examines the journey ahead.

  • 2014 tax risk and controversy survey highlights

    Bridging the divide between current and future risk management frameworks can be a challenge. Our survey reveals actions to help you prepare.

  • Managing indirect tax in the digital age

    Multinational companies are handling large quantities of complex data about indirect taxes. We outline hands-on approaches that can help deal with all that information.

  • Budget 2014

    Read our analysis of Budget 2014, including Budget Alert, which gives insight on employment, personal, corporate and indirect tax measures, plus EY ITEM Club comment.

  • OECD provides update on the BEPS Action Plan

    On January 23, 2014, the Organization for Economic Cooperation and Development hosted a webcast on the base erosion and profit shifting project. Learn more.

  • Tax Policy and Controversy Briefing goes online

    The speed of change continues globally. Keep up-to-date on tax policy, legislative and regulatory developments with our new web-based Tax Policy and Controversy Briefing.

  • Tax Transparency

    The trust an organisation builds with its stakeholders is critical, and tax transparency is a key dimension in building that trust. Find out how we can help.

Tax Services

We’ll help you navigate the global tax landscape

The business and tax landscapes have changed dramatically, and the pace and complexity of change continues to increase. Governments are tempering the need for revenue with increased competition for labor and capital. Tax authorities are adapting their enforcement strategies, focus and policies in response to the changing dynamics of business. Companies are balancing competing priorities, ensuring they maintain compliance while adding value.

We can assist you with these critical issues in today's tax environment, including:

Building a tax manifesto for manufacturing 658K, August 2014

  • Midweek Tax News


    A weekly update on tax matters to 23 September 2014

    Midweek Tax News provides you with a succinct overview of the key tax developments that have occurred each week, to allow you to stay up-to-date on tax issues that may have an impact on your business. If you would like to discuss an article in more detail, please do speak to the relevant contact listed at the end of this issue or to your usual EY contact.

    The outcome of the Scottish Independence Referendum has now been declared and the people of Scotland have voted to remain as part of the UK.

    However, it is clear that Scotland's tax landscape is still changing. Under the Scotland Act 2012, Scotland has already received additional fiscal autonomy through the devolution of powers over three taxes: land and buildings transaction tax; landfill tax and the Scottish rate of income tax. Scotland is set to take control of the first two of these taxes from April 2015 with the devolved rate of income tax effective from April 2016. Our tax alert focuses on the implications of the income tax changes for Scotland.

    It is expected that additional control over taxation will pass to Scotland given that the pro-unionist parties have already shared their views on what further devolution might look like. By the end of November 2014, a white paper will be published setting out heads of agreement between the major parties on the next stage of devolution. By 25 January 2015, a new draft Scotland Act will be published and in May 2015, a new Scotland Act will be included in the first Queen's speech of the new UK Parliament.

    During this time, a consultation period will be observed giving both business and citizens of Scotland the opportunity to influence the changing landscape of Scotland and enable them to help shape their future country.

    Against the backdrop of a UK General Election in May 2015, a Scottish Election in May 2016 and a possible referendum on the UK's membership of the EU in 2017, this is an uncertain time for businesses across the UK. Additional uncertainty arises as the implications of the referendum vote may also extend to other regions of the UK, given the growing debate about the respective roles of the UK's parliaments and assemblies.

    If you would like to discuss the impact of Scotland's changing landscape on your business in more detail, please speak to your usual EY contact.

    If you missed our hour-long webinar (which took place yesterday, 23 September) looking at the outcome and implications of the referendum vote a recording can be accessed here.

    In a notice issued on 22 September 2014, the US Treasury Department and IRS announced their intention to use existing powers to issue regulations aimed at preventing some of the tax benefits that are associated with certain corporate inversions by:

    • Treating certain upstream loans from controlled foreign corporations (CFCs) of the US group directly to the new foreign parent as taxable dividend income of the US group

    • Treating shares in CFCs of the US group acquired by the foreign parent in CFCs (in order to de-control them from the US group) as shares in the parent of the US group, so that the foreign subsidiaries remain CFCs

    • Limiting an inverted group's ability (or in some cases, the ability of even a non-inverted foreign group) to transfer CFCs or CFC deferred earnings ‘out-from-under’ the US group to the foreign parent in certain tax neutral transactions

    It is currently possible for inversion transactions to be rendered ineffective for US tax purposes (ie, the new foreign parent is treated as a US corporation for US tax purposes, despite its foreign legal residence) if 80% or more of the shares of the foreign parent remains owned by the prior shareholders of the US group.

    The regulations would also aim to make inversion transactions more difficult by:

    • Limiting the ability to decrease the value of new foreign parent shares held by the prior shareholders of the US group via pre-inversion distributions

    • Limiting the effective use of certain ‘cash box’ entities (ie, foreign entities with greater than 50% passive assets) as the new foreign parent by disregarding certain shares in the new foreign parent held by the former foreign target shareholders for purposes of the ownership condition

    • Limiting so-called “spinversions” and other similar transactions by narrowing the internal restructuring exception in the applicable regulations, which was formerly thought to allow such transactions

    Whilst the relevant regulations have not yet been issued, the intention is that they would apply to inversion transactions undertaken on or after 22 September 2014. Any group considering an inversion transaction should carefully consider these developments.

    Party conference season has now begun. The Labour Party annual conference, which has been taking place in Manchester, is due to finish today (24 September). This will be followed by the Conservative Party conference in Birmingham from 28 September to 1 October and the Liberal Democrat conference in Glasgow from 4 to 8 October.

    During Labour's Shadow Chancellor Ed Balls' speech on 22 September, he announced some of the headline tax changes which would be introduced if the Labour Party were to win the next election, namely: cut business rates; tackle tax avoidance; introduce tax cuts “for millions – not millionaires”; tax bank bonuses; and scrap the ‘bedroom tax’ (the housing benefit under occupancy charge).

    Labour pledged to cut taxes for 24 million people on middle and lower incomes by introducing a lower 10p starting rate of tax (which currently applies only to savings income), restoring the 50p rate of tax for those earning over £150,000, and introducing a mansion tax on homes worth over £2 million.

    The Labour Party previously published a policy document entitled Delivering long-term prosperity – Reform of Business Taxation in July. This follows on from a policy review launched in May 2013 which involved consultation with businesses, trade unions, entrepreneurs, tax professionals and others. The report sets out a broad approach to business taxation that is guided by four fundamental principles with specific proposals in each area:

    • Promoting long-term investment: In particular, by (i) examining proposals to redress the systemic bias in favour of debt finance; and (ii) exploring the possibility of structural changes to the tax system to incentivise long-term investment (with reference being made to the concept of an allowance for corporate equity as recommended by the Mirrlees review and to a new tapering relief from capital gains tax on shares and income tax on dividends as recommended by the Cox review)

    • Support for enterprise and innovation: In particular, by (i) providing tax breaks to growing businesses; and (ii) examining ways of improving the targeting of research and development tax credits

    • Simplicity and predictability: In particular, by (i) supporting simplicity; and (ii) drawing up a roadmap for capital allowances

    • A commitment to fairness: In particular, by (i) taking the lead on tax transparency; and (ii) ending exploitation of the quoted eurobond exemption

    We will bring you details from the other main parties' conferences in future editions of Midweek Tax News.

    On 21 September, at their meeting in Cairns, Australia, the G20 Finance Ministers formally endorsed the first seven deliverables under the OECD Base Erosion and Profit Shifting (BEPS) Action Plan. The G20 issued a communiqué following the conclusion of the meeting. This affirmed the G20's commitment to a global response to cross-border tax avoidance and evasion, welcomed the progress achieved towards the completion of the Action Plan and committed to finalising all remaining action items in 2015. Following on from this, on the 22 September, the OECD and its Global Forum on Transparency and Exchange of Information announced that it had been mandated by the G20 to develop toolkits to support developing countries addressing BEPS and to launch pilot projects to assist them to move towards automatic exchange of information.

    As covered in last week's Midweek Tax News, the deliverables were released on 16 September and represent a key step in the OECD's plans to ensure that profits are taxed where economic activities generating the profits are performed and where value is created. They are the result of a collaborative effort between governments from OECD member countries, with input from more than 80 developing countries and from the global business community and other stakeholders.

    An international tax alert is available giving a high level overview of the documents released on all the seven Actions. Further international tax alerts with a detailed analysis of each of the deliverables will be available through our Global tax alert library.

    Separately, on 20 September, HM Treasury issued a press release ‘formally committing’ to implementing the Action 13 country-by-country reporting template, though no comment was made with regard to timescale.

    At 15:00 on 24 September, we are holding an in-depth global webcast (register here) to review each of the documents issued by the OECD, examine the expected reactions of key countries, evaluate the implications for multinational businesses, review the OECD BEPS agenda for the remainder of 2014 and 2015 and assess the commencement of work on the other eight Actions. We are also holding a breakfast seminar in London on 15 October (rescheduled from 16 October). Please click here to register.

    While the OECD continues its work on the BEPS Action Plan, countries around the world are already acting to address concerns about BEPS through legislative and regulatory change and a shift in administrative practices (see for example the developments in France and Poland reported in today's edition of Midweek Tax News).

    Another development at the G20 Finance Ministers' meeting last weekend was the formal presentation by the OECD of the final form of the Standard for Automatic Exchange of Financial Account Information in Tax Matters. The standard calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions that are required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

    Simultaneously, the G20 published a plan to implement the standard and translate it into domestic law. The implementation plan is based on responses to a survey of all of the G20 members together with Spain, New Zealand and Singapore. It shows that almost all members intend to meet the timetable proposed by the Chair of the Global Forum on Transparency and Exchange of Information for Tax Purposes for exchanging information under the standard in 2017 or 2018. The remaining members indicted that their implementation timeline is still under consideration. The plan also highlights a number of common issues affecting implementation timetables, including the need to undertake consultations and accommodate legislative and system changes.

    In its judgment in the case of Skandia America Corporation USA, Sweden branch, the Court of Justice of the European Union found that a VAT group is a wholly ‘new’ and separate taxpayer from its constituent members.

    Depending on how this decision is implemented, it could result in significant additional costs for a UK VAT group which receives intercompany services from its non-UK operations. Going forward, UK businesses may need to account for VAT on all intercompany services provided into the UK VAT group. This could particularly affect banks and insurance companies which may be required to charge VAT on branch-to-branch services which are currently disregarded.

    The impact of the Skandia case is not limited to the UK, given the majority of EU Member States disregard supplies between branches of the same legal entity. The judgment is likely to result in a complete change regarding how and where VAT is accounted for. The resulting structural, administrative and reporting changes will also need to be considered.

    Our tax alert has further details.

    The First-tier Tribunal has now listed the Adecco case for hearing, between 11 and 15 May 2015, which takes forward similar arguments to those raised in the Reed case which challenged HMRC's position that VAT was due on all payments received by an employment bureau from its clients.

    Following the withdrawal of HMRC's staff hire concession from 1 April 2009, VAT became chargeable on the supply of temporary staff. Until then, workers could be provided through an employment bureau without VAT having to be charged on the workers' wages and national insurance contributions. From April 2009, unless the provider is an employment agency, VAT has to be charged on the full price payable by the user's organisation, including the worker's wages etc. If that organisation is unable to recover the VAT charged it will have suffered a substantial increase in costs.

    In 2011, the First-tier Tribunal released its decision in the earlier Reed case and held that the regulatory position and a principal/agent analysis were not sufficient to determine the VAT position. The economic reality of what was being supplied also had to be considered. As Reed did not exercise control over its temporary workers, the Tribunal held that there could be no passing of control to the client. Rather, it was the client who was responsible for the supervision and control of the temporary worker for the duration of the assignment. Accordingly, the Tribunal held that the taxpayer supplied introductory services rather than making a supply of staff as principal, such that VAT was only due on the commission element of its charge. However, in August 2011, HMRC issued Revenue & Customs Brief 32/11, confirming that it considered that the Reed case was decided on its specific facts and did not have any wider impact.

    In light of this latest development, employment agencies and VAT-averse users of temporary staff may wish to revisit the current VAT treatment of temporary workers and consider submitting claims to protect their position if they have not already done so.

    Employment taxation: Recent developments

    Collection of debt through coding out

    HMRC currently has the power to collect debts, PAYE underpayments and self-assessment balancing payments up to £3,000 by way of ‘coding out’. The Income Tax (Earnings and Pensions) Act 2003 (Section 684(3A)) Order 2014 comes into force on 3 October 2014 and will increase the limit on the amount of debt that can be coded out in a year to £17,000. It has effect for deductions made in the tax year 2015-16 and subsequent tax years.

    Medical treatment

    Section 12 Finance Act 2014 introduces a new income tax exemption, capped at £500 per employee per year, for expenditure by employers on recommended medical treatment that is intended to help an employee return to work after a period of absence due to injury or ill-health. Draft regulations, setting out the additional conditions that a recommended medical treatment must meet in order to qualify for the exemption, have been published for comment by 15 October. These conditions include the number of days an individual receiving a recommendation must be assessed as unfit for work, who can carry out such an assessment and the manner of the assessment.

    Enterprise management incentive changes

    A new statutory instrument brings into force, from 1 October, the amended independence requirement for the enterprise management incentives tax-advantaged employee share scheme so as to accommodate companies that are subject to an employee-ownership trust.

    Changes in VAT grouping and the assignment of rights: Entitlement to make a claim for repayment of VAT

    The Upper Tribunal has released its decision in the Taylor Clark Leisure case, concerning HMRC's decision to refuse a number of Fleming claims (covering the period 1973 to 1996) for overpaid VAT. The claims were made in 2007 by what was previously a subsidiary of the taxpayer. However, no timeous claims were made by the taxpayer itself. The taxpayer, which was the representative member of a VAT group of which the subsidiary was previously a member, contended that the claims made by the subsidiary should be repaid to it.

    The First-tier Tribunal held that the taxpayer had never made a claim, it could not rely on the claims made by the subsidiary and further, that it was the subsidiary, rather than the taxpayer, which would have been entitled to any VAT repayment. In overturning the First-tier decision, the Upper Tribunal held that the taxpayer, as the representative member of the VAT group, would have been entitled to claim repayment of output tax overpaid. However, as the taxpayer made no claims before the expiry of the limitation period, its claims were time-barred.

    Any business which has outstanding or new claims for overpaid VAT with HMRC and may be affected by a change in VAT grouping and/or the assignment of rights to other entities may wish to consider the impact of this decision as well as the impact of ongoing litigation in the cases of MG Rover and Standard Chartered.

    New Russian sales tax cancelled

    On 18 September 2014, the Russian Government announced that it had cancelled plans to introduce a new federal sales tax in 2015. The tax had been proposed for introduction by the 85 federal regions within the Russian Federation and draft legislation had been drawn up to allow the regions to introduce the tax with effect from 1 January 2015. Under the proposals, organisations and individual entrepreneurs carrying out activities in federal regions where a sales tax has been introduced would have been liable to charge and account for the tax. The initial draft provided for the implementation of a sales tax at a maximum rate of 3% on goods, services and works supplied to individuals.

    Our international tax alert has further details.

    Russia updates draft law relating to controlled foreign companies and corporate tax residence

    Separately, the Russian Ministry of Finance has published a substantially revised version of the draft law on the package of tax initiatives collectively referred to as “de-offshorization”. The new version includes a number of important changes affecting such matters as exclusions from classifying companies as controlled foreign companies, criteria for determining the tax residency of foreign companies, notification requirements in relation to participation in Russian and foreign companies and the ownership of Russian property.

    The key changes are summarised in our international tax alert.

    French transfer pricing documentation requirements

    In December 2013, the French Government adopted a new, additional transfer pricing documentation requirement obliging certain taxpayers to file ‘reduced’ transfer pricing documentation within six months of the official deadline for filing their tax return. The French tax authorities have now issued a final version of the statement together with guidance to assist taxpayers in complying with this new law.

    With the first deadline of 20 November 2014 fast approaching our international tax alert summarises the new documentation requirements.

    Enactment of tax reform in Poland

    On 16 September 2014, the President of Poland signed a tax bill which introduces several changes to the Polish corporate tax rules. The new measures include the introduction of controlled foreign corporation rules and much broader thin capitalisation restrictions together with an extension of transfer pricing documentation requirements to joint ventures and partnerships.

    In additional the Polish participation exemption regime will be amended such that the exemption will not be available to taxpayers receiving dividends that give rise to a deduction from the income (or other decrease in the taxable base or amount of tax) of the distributing company.

    There may be some steps which groups could be taking in advance of these amendments. Our international tax alert provides further details.

    Other international tax alerts

    Please see links to a selection of our international tax alerts in respect of the following developments. Additional articles are available in our Global tax alert library.

    Philippines: The Government has made a proposal to reduce the corporate income tax rate from 30% to 25% and increase the minimum corporate income tax rate from 2% to 5%.

    Brazil: The Federal tax authorities have issued a private letter ruling on the withholding tax treatment applicable to vessel charter payments.

    Chile: Congress has approved a bill which, once enacted, will introduce a number of significant amendments to Chilean tax law including the introduction of a new thin capitalisation regime, controlled foreign corporation rules and a general anti-avoidance rule.

    Slovakia: The Ministry of Finance has released new guidance on transfer pricing documentation requirements.

    Other publications

    Please speak to your usual EY contact, or email us at eytaxnews@uk.ey.com, if you would like to receive a copy of our regular indirect tax newsletter, or information about our other publications.

    Further information

    If you would like to discuss any of the articles in this week's edition of Midweek Tax News, please contact the individuals listed below, Claire Hooper (+ 44 20 7951 2486), or your usual EY contact.

    Scotland's changing tax landscape

    Email Paul Gallagher

    + 44 131 777 2822

    US Treasury to issue regulations aimed at inversion transactions

    Email Cliff Tegel

    + 44 20 7951 1417

    Labour Party conference

    Email Chris Sanger

    + 44 20 7951 0150

    G20 Finance Ministers' meeting: OECD BEPS deliverables

    Email Claire Hooper

    + 44 20 7951 2486

    G20 Finance Ministers' meeting: Automatic exchange of information

    Email Julian Skingley

    + 44 20 7951 7911

    VAT treatment of cross-border intra-company transactions within a VAT group

    Email Andrew Bailey

    + 44 20 7951 8565

    VAT and temporary staff appeal

    Email Robert Crooks

    + 44 161 333 2815

    For other queries or comments please email eytaxnews@uk.ey.com.

    Back to the top

  • Operating in a shifting tax landscape

    The global tax landscape continues to change in a dramatic fashion, with near-constant news hitting the headlines regarding shifting tax policy, increasing levels of enforcement and the growing potential of reputational risk.

    Competing priorities

    Multinational companies now have to balance more competing priorities than ever before, ensuring they protect their business by monitoring and responding to changes in policy, legislation and tax enforcement, while at the same time ensuring they not only maintain the highest levels of compliance but also add value from the tax function.

    Governments work to secure each tax dollar they're due

    From a policy perspective, all governments want their country to be viewed as an attractive place to do business, to attract jobs and capital in an increasingly competitive globalized arena.

    At the same time, they want to increase the amount of revenue they bring in. Governments are treading a fine line, constantly assessing how to secure the tax revenues they see as rightly theirs, while at the same time being in direct competition with other nations, making sure they do not scare off mobile capital.

    Tax administrations for their part are adapting their enforcement strategies, focus and policies in response to the changing dynamics of business. They are working to ensure that their resources are being applied to the right issues and taxpayers. They share more leading practices and taxpayer information with their foreign counterparts, to help them collect every dollar due.

    Disputes are on the rise

    The result has been more  frequent, complex and higher value disputes between taxpayers and taxing authorities — a trend that is only increasing as countries collaborate together and as emerging markets gain in stature and influence, taking a more sophisticated approach to taxation. Penalties are becoming more stringent and the threat of reputational risk has risen significantly in recent months.

    We can help you to navigate a route through this complex landscape.

    We can help you monitor and react to quickly-changing tax policy and assess the economic and fiscal impact.

    Where tax policies might create an impediment to your business that is unintended by policy makers, we can help you to collaborate – either solely, or as part of a broader grouping of companies who share a common objective – with government to:

    • Explain the impediment
    • Develop alternative policy choices which are logical and well thought out
    • Model the potential outcomes
    • Deliver an alternative choice to the government in a form with which policy makers can comfortably work

    We also help you address your global tax controversy, enforcement and disclosure needs.

    We focus on pre-filing controversy management to help you properly and consistently file your returns and prepare the relevant back-up documentation.

    Where a controversy has already occurred, our professionals leverage the network's collective knowledge of how tax authorities operate, and increasingly work together, to help resolve difficult or sensitive tax disputes. To ensure that continuous performance improvements are instigated after a controversy, we work with EY's other tax professionals to ensure that similar events are less likely to occur.

    Below you can access our views and analysis of some of the substantial policy and enforcement trends and issues at play today.

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  • Seizing the opportunity in Global Compliance and Reporting

    Global Compliance and Reporting (GCR) is at a tipping point, with risks on the rise. Many companies distribute responsibility for GCR processes throughout their organization, creating a patchwork. Local jurisdictions are rewriting regulations, focusing more intently on the collection of tax revenues and sharing more taxpayer information across borders.

    Due to the combination of evolving business models, transforming finance functions and an increasingly complex regulatory landscape, there are new opportunities to better optimize efficiency, control and value, to help mitigate risk and improve performance.

    What is Global Compliance and Reporting?

    GCR comprises the key elements of a company's finance and tax processes that prepare statutory financial and tax filings as required in countries around the world. These duties include:

    • Statutory accounting and reporting
    • Tax accounting and provisions
    • Income tax compliance
    • Indirect tax compliance
    • Governance and control of the above processes

    GCR activities reside in the middle of a broader set of record-to-report (R2R) processes. R2R is the intersection between any company's finance and tax departments and is used to capture, process and store information that is essential to statutory accounting, tax compliance and reporting. Any change to R2R processes, information, finance systems, roles and responsibilities will have a direct impact on GCR processes.

    Helping you meet the new GCR demands

    Fast changing compliance and reporting requirements are more demanding on tax and finance functions today than ever before. So how do you improve control and quality, manage risk, create efficiency and drive value?

    Our market-leading approach combines standard and efficient processes, highly effective tools and an extensive network of local tax and accounting subject matter professionals.

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  • Building effective supply chains

    As multinational companies seek to reach new markets and compete more effectively in mature markets, they are adapting and differentiating their supply chains. Companies’ operating models need to cater for efficiency and scale in mature markets, while having the flexibility and local ability to support growth in emerging markets. Consequently, driving true shareholder value requires an operating model that combines global and regionally differentiated processes, and integrates these with local striking power and operational excellence.

    Leading companies recognize the need for integrating tax in their business planning and decision processes

    Whether companies seek to enter new markets or drive efficiencies in mature markets, leading companies understand the complexities of the international tax systems. The impact of both direct taxes and indirect taxes needs to be carefully considered and integrated to drive the effectiveness of the operating model while complying with all applicable local and international tax laws and effectively manage all tax risks. Operating model effectiveness is becoming one of the cornerstones of successful competition and differentiation.

    Our approach

    The EY TESCM offering helps ensure you do just that. Our advisory and tax professionals operate as one team to assist our clients with developing and implementing operating model optimization where business needs and requirements are the driver while making sure that tax is an integrated part of the design of the operating model architecture.

  • Managing mobile workforce risk

    In today's globally integrated, tightly regulated and increasingly competitive business environment, one critical success factor stands out: people. It’s no wonder that leading companies are focusing their efforts on:

    • Attracting and retaining the right people
    • Global talent deployment and mobility
    • HR and payroll effectiveness
    • Risk, governance and compliance

    Managing the risks of mobile employees

    While optimizing the competitive advantage of your people has long been a core objective, a more recent set of trends in the tax landscape means that large companies with an internationally mobile workforce are at a higher risk of tax noncompliance and resulting controversy than ever before.

    Fortunately, an increasing number of organizations are currently either planning or embracing a wider process of change for their mobility teams.

    Unintended tax compliance obligations

    These travelers are increasingly creating unintended tax compliance obligations, and the resulting risks are not just personal. They are felt at the corporate level, with the corporate tax function often unaware of the extent of the spreading problem. Tax administrations are becoming increasingly aware of the issue, however, and are very effectively using new technology to identify where a tax obligation has arisen. In a rising tax enforcement landscape, this issue has significant potential to grow.

    Managing these risks should be a burning platform issue for multinational companies.

    Will your tax risks prompt a tax audit?

    What may start as a relatively simple personal income tax compliance issue can quickly create a ripple effect, with risks such as the creation of a permanent establishment, an employment tax audit or the payment of a significant related penalty all occurring at the corporate level.

    Companies, recognizing the spectrum of reputational, personal and financial risks related to tax, are making strong efforts to be compliant. There is an increasing acceptance that such issues are becoming increasingly urgent from both a reputational and a financial perspective.

    How we are helping companies

    Our Human Capital network embeds processes and technology that will help companies to identify and manage short-term business traveler-related risks before they occur. Where controversy has already arisen, our global Tax Controversy network can use our insights into the culture and processes and relationships with each key tax administration to remediate issues. With prior year issues being rapidly unearthed, and with tax administrations focusing on this issue more than ever before, the time to act is now.

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