A worry shared, the saying goes, is a worry halved. That may be why tax leaders at multinational companies (MNCs) were asked to name their most pressing concerns at a forum held earlier this year. Bloomberg Tax Technical Editor Stephen Hetherington reports on those concerns here. If you’ve been experiencing anxiety about any of the following challenges, it might be reassuring to know you’re not alone:
1. U.S. tax reform: Tax leaders face two concerns around the Tax Cuts and Jobs Act of 2017. First, they need to understand how the new rules will affect their business – no easy task, given the speed with which the legislation was passed, leaving companies little time to prepare. As my colleague Nancy Manzano, a director in Vertex’s Chief Tax Office, notes in this Tax Matters post, the calculations and filings will be more complex for many businesses. Second, tax execs fret the new law may not be permanent.
2. U.K. political uncertainty: Concerns about Brexit are easing and tax leaders are currently planning for Brexit to occur in May 2019. However, some tax leaders worry about the ability of Prime Minister Theresa May’s party surviving until the Brexit deadline and the impact that could have on Brexit and their planning.
3. Public relations: Recent tax scandals like Panama Papers and other scandalous headlines, have convinced businesses they need to be more proactive in explaining their tax strategies as part of managing their tax reputation and public relations risks. “Many companies are now issuing tax strategy documents (either to their employees or to a wider audience) explaining, at least in general terms, what they are doing and why they are doing it,” Hetherington notes.
4. Digital taxation: The OECD Interim Report on BEPS Action 1 – Taxation of the Digital Economy and the European Union’s Fair Taxation of the Digital Economy were much on the minds of forum participants. Some EU member states, including France, are considering imposing their own versions of such a tax, Hetherington notes. India also has announced its intention to tax certain sales made over the internet.
5. Global political uncertainty and instability: These are always with us, so it’s perhaps no surprise they were the most pressing issues discussed by event participants.
These issues will continue to keep tax leaders up at night, and as always, we’ll keep you updated as new details arise.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.