Taxand Global Indirect Tax Seminar
The seminar focused the implications of the latest indirect tax issues for multinationals, including recent ECJ rulings, upcoming legislation updates & international indirect tax trends, while also providing an opportunity to network with peers and global Taxanders.
Below are the key pointers from the seminar:
- The shift towards indirect taxation - in the past 20 years there has been the continuing trend of rising VAT rates and falling corporate income tax rates
- MNCs should look at how they structure how they pay indirect taxes, as this should be very different to how direct taxes are paid. However MNCs should continue to watch CIT developments; there are many factors beyond pure economics that determine how Governments collect the level of tax receipts they require for public spending and investment
- We are seeing an increasingly aggressive approach from tax authorities - there has been a significant increase in penalties with non-proportional fines
- MNCs should safeguard against any disputes by keeping a log of payments and actions and implement regular strategic reviews to identify potential issues before they become critical
- M&A costs can be problematic in the VAT world. Multinationals should be wary of using holding companies for bidding purposes as they are not exempt from VAT
- MNCs should prove the holding company has the intention of providing services to the company it is in the process of acquiring - ie management services - in order to avoid a VAT recovery denial
- VAT Place of Supply rules 2015 - new rules for VAT collection will be implemented in January 2015 for B2C digital service providers in the telecommunications, broadcasting and electronic supply (or e-services) industries
- MNCs should look into using MOSS ahead of first registrations, taking place 1 October 2014, and investigate how each jurisdiction, within which they have operations, is dealing with the updated rules
- Important ECJ ruling: Skandia America Corporation - This will add an additional tax burden of hundreds of millions on multinationals across Europe as any internal costs between a firm’s branches, if they belong to a VAT group, will now face VAT
- MNCs should investigate how internal costs are distributed within the organisation to ascertain if this ruling affects business practices and how
- Asia indirect tax developments - Asia is slowly catching up with Europe by updating their indirect tax regimes. This move will help simplify current tax structures, eliminate overlap between differing taxes, minimise VAT ‘cascading’ and harmonise audit practices while accelerating dispute practices
- MNCs should keep afresh of all indirect tax regime developments within their Asia jurisdictions of operations in order to remain compliant
Your regular update on the latest issues affecting multinationals globally.