Published: February 2017Contents
i) What are the hot topics?
The global economy has resulted in an unprecedented flow of capital, goods and services across international borders. Businesses need to be aware of the tax regimes that affect them in multiple jurisdictions and how such regimes interact. There are tax pitfalls to be avoided, but there is also scope for securing favourable tax results. Such tax benefits may sometimes arise as a result of artificial structuring and governments are actively legislating to combat abuses that erode their tax bases.
ii) Tell us about any key legal developments – recent or pending – and their international impact.
The current edition of The Inward Investment and International Taxation has a chapter dedicated to the Organisation for Economic Co-operation and Development Action Plan on Base Erosion and Profit Sharing (BEPS), and individual chapters reflect areas where the BEPS has already influenced or been introduced into domestic laws.
iii) What are the biggest opportunities and challenges for practitioners and clients?
While it is easy to identify highly structured, artificial and abusive transactions at the extreme, there is a middle ground where with no complex structuring, or even with no structuring at all, benefits arise solely or primarily as a consequence of carrying on business on a normal commercial basis across borders, under different tax laws that apply different rates of taxation. How businesses operating in this middle ground will be treated as multiple jurisdictions introduce tax laws to protect their tax base is an area of concern, as widely drafted laws, designed to ensure that those guilty of the worst excesses will be caught, can often be applied without great difficulty to those that are not the intended target.