Taxand provides its top key pointers for multinationals operating in Asia
Representatives from Taxand, the world's largest organisation of tax advisors to multinational businesses, travelled from Australia, India, Indonesia, Luxembourg, Philippines, Singapore and Thailand to attend, chair or sit on panels at the International Tax Review's (ITR) recent Asia Tax Executives' Forum 2013. From these panel sessions we've put together Taxand's top key pointers for multinational companies operating in Asia, covering:
- Transfer pricing: Tailor your global TP documentation to effectively manage risks in complex jurisdictions. Clearly communicate and involve your in-house tax department in operational changes. With intangibles gaining focus in Asia, it is essential to take a consistent approach to arm's length application to minimise risk of non-compliance.
- Anti-avoidance: With shifting burden of proof requirements and focus on "ordinary issues" like sham, substance over form, deductibility, beneficial ownership and transfer pricing, stakeholders must be aware of the need for robust documentation to ensure compliance with GAAR regulation.
- Dispute resolution: As litigation levels increase in Asia, understanding local dispute options is essential. Multinationals should familiarise yourself with the alternative dispute resolution mechanisms (MAPs, APAs etc) to benefit, as these are becoming increasingly complex and necessary, in response to transparency requirements from authorities.
- Indirect tax: Tax reform is nigh - indirect and direct taxes are being leveraged for base broadening purposes, often to balance corporate tax rate reductions. Future proof your business by ensuring your tax planning accounts for potential fluctuations in indirect and direct tax rates.
- Tax technology: The latest technologies enable effective compliance management, freeing up your time for tax planning and strategy. Multinationals should be familiar with the latest tools to understand the benefits of minimising tax leakage whilst also maintaining a competitive edge.
- ASEAN markets: Myanmar is now the China of 20 years ago - despite its foreign investment law being implemented, income tax regimes remain the same, making it an appealing investment location for MNCs.
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"Asia remains in a period of flux, as tax authorities contemplate measures to combat ongoing revenue deficits and whether they will join other countries in the adoption of more transparent initiatives, particularly in light of the OECD's BEPS project.
This creates an uncertain environment for multinationals, but one that should not be create great concern, so long as companies remain vigilant around their commercial rationale of their tax planning and maintain accurate and comprehensive records."