Light shed on tax changes at the ITR ATEF 2016
Taxand participated at the International Tax Review's (ITR) 11th Asia Tax Forum, held in Singapore on 4 and 5 of May, with 13 Taxand and guest speakers across three panels for more than 100 tax professionals in attendance. The Taxand panels addressed a wide range of issues including the impact of the OECD’s BEPS proposals, how tax disputes are best resolved and how multinationals should be prepared for more changes.
The Asia tax environment continues to change rapidly, becoming ever more complex. This year’s forum covered a broad spectrum of tax issues currently affecting the region, such as the introduction of general anti-avoidance (GAAR) and limitation of benefits (LOB) rules as well as indirect tax developments in China and Malaysia.
Taxand’s key pointers for multinationals at the event were:
- Be prepared for more changes: The Asia tax environment continues to change rapidly and is becoming more complex, for example, by various challenges to beneficial ownership and indirect transfers and heightened substance requirements. It is also becoming more uncertain, for example through the introduction of general anti-avoidance (GAAR) and limitation of benefits (LOB) rules
- BEPS proposals are an impact: OECD BEPS proposals, such as country by country reporting, are being adopted broadly as emerging economies strive to join the global market place
- Asian indirect taxes mature into modern regimes: VAT has been adopted in China and Malaysia, demonstrating how the old “scatter-gun” Asian indirect taxes are maturing into modern and comprehensive tax regimes. It should be noted that Chinese VAT has multiple rates and applies to financial services, health care and education
- China’s continues: China has introduced Announcement 7 – a reporting and withholding rule with implications for transfers of Chinese real estate, both direct and indirect. The obligations apply to buyers and sellers with heavy penalties for failure to comply
- Tax disputes in Asia are best resolved at an early stage: Preferably at audit, as cases can take years to resolve once they reach the courts. In addition, costs, charges and fines can be incurred in jurisdictions, such as Indonesia, if court intervention is required
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The Tax environment in Asia continues to evolve and is becoming increasingly complex as countries aim to modernise their tax policies. Multinationals operating in this region will need to be aware of changes affecting the global tax landscape, such as the OECD’s BEPS proposals, but also significant changes in individual countries such as China and Malaysia where indirect taxes are increasingly being adopted.