How has the Covid-19 pandemic impacted your work?
Tax work is busier than ever There has been both an increase in economic activity needing sophisticated tax work and increasing complexity of tax law around the world. Both of these factors has driven an extraordinary demand for tax services.
How has your practice had to adapt, and how do you expect it to change further?
The basic principles of tax are constant, with evolutionary rather revolutionary adjustments. Therefore, adaptation is also evolutionary. I’d say the largest area of adaptation is the increased possibility of double and multiple jurisdiction around the world.
How much of that impact will have a permanent, lasting effect?
What are the biggest challenges relating to that impact do see as presenting the most challenging obstacle going forward, and how do you plan to tackle it?
What is the most significant change to your region/jurisdiction’s transfer pricing legislation or regulations in the past 12 months?
There have been no material changes in the last 12 months, but the ever-constant issue in both the U.S. and around the world is the extent to which tax authorities will continue to adhere to the arm’s length standard. I have found that adherence to the arm’s length standard varies with jurisdiction (and sometimes within the same jurisdiction), and this requires ever-more vigilance and attention.
What has been the most significant impact of that change?
There has been a steady increase in recordkeeping and documentation requirements. There has also been increased prospects of double taxation which the various national taxing authorities and taxpayers are having to address in their own ways.
How do you anticipate that change impacting your work and the market moving forwards?
There have been more tax controversies across multiple jurisdictions for the same taxpayer. If the global tax consensus continues to erode, I would expect to see more multi-jurisdictional controversies.
How has this changed the way you offer TP advice
What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?
OECD Pillars are increasing the already high prospects of double taxation worldwide. It is becoming increasingly challenging to manage transfer pricing in a manner that adheres the model of a single jurisdiction, and only that jurisdiction, subjecting a dicrete tranche of income to tax.
What are the potential outcomes that might occur if those changes are implemented?
More controversy with increased prospects of double taxation
Do you think that change will have a positive effect on both your practice and the wider regional/jurisdictional market?
It will make managing transfer pricing more difficult and time-consuming
How are issues surrounding the taxation of the digital economy affecting your work?
How would you describe the tax authorities’ approach to transfer pricing in your region/jurisdiction?
On the aggressive side.