OECD BEPS Update Amcham, 21 February 2017
BEPS implementation: What and how? Coherence Hybrid mismatch arrangements (2) Substance Preventing tax treaty abuse (6) Transparency Methodologies and data analysis (11) Changes to domestic legislation needed Controlled foreign company (CFC) rules (3) Interest deductions (4) Harmful tax practices (5) Avoidance of permanent establishment status (7) Transfer pricing (TP): intangibles (8) TP: risk and capital (9) TP: high risk transactions (10) Disclosure rules (12) TP documentation (13) Dispute resolution (14) Interpretation of existing treaty article Peer review mechanisms Changes to bilateral tax treaties needed Digital economy (1) Multilateral instrument (15)
BEPS inclusive framework Membership Last update: 27 January 2017 Jurisdictions that are BEPS members
Enhanced transparency; How will tax administrations react? Country-by-Country Reporting TP Masterfile and Local File Publicly available information is also growing and better accessible with improved data mining tools More co-operation between tax administrations: multilateral platforms for dialogue, more exchange of information, joint audits The use of data analytics and IT in the tax administrations compliance strategy How are you going to react to this change in the transparency environment?
OECD Multilateral instrument Timeline and impact The intention of the MLI is to enable jurisdictions to quickly implement treaty-related measures developed in the course of the work on BEPS, including the BEPS minimum standards. No bilateral negotiations needed. According to the OECD, the MLI could lead to the application of 2,000 out of more than 3,000 treaties currently in force being amended. The MLI will lead to the broad implementation of the anti-treaty abuse measures which are part of the Minimum Standard on Treaty Abuse. Main target: Treaty Shopping. OECD released final report on MLI OECD released the text of the MLI MLI open for signature High-level signing ceremony Entry intro force 5 October 2015 24 November 2016 1 January 2017 Week 5 June 2017 Will depend, but expected in a broad fashion from 2019. At the moment of signature countries are required to provide a list of notifications so that Signatories will have the opportunity to discuss. The MLI will enter into force after five countries have ratified it. It will only apply for a specific tax treaty after all parties to that (often bilateral) treaty have ratified the MLI and either 6 months or an agreed period of time has passed. Page 5
Overview OECD MAP statistics 7 000 OECD member countries inventory of MAP cases 6 176 6 000 5 439 5 000 4 566 4 000 3 426 3 328 3 838 4 073 3 000 2 352 2 671 2 897 2 000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: OECD http://www.oecd.org/tax/dispute/map-statistics-2015.htm
MAP Statistics: newly initiated cases According to the OECD data, member countries saw an 11% increase in new MAP cases initiated in 2015, rising to 2,509 cases from 2,259 in 2014. Belgium experienced the largest overall number of new MAP cases of all member countries - from 205 in 2014 to 428 in 2015. Of the top 10 member countries based on number of new cases, Belgium had the highest growth of 109%, followed by Luxembourg at 83% (from 116 in 2014 to 212 in 2015), the Netherlands at 47% (from 87 in 2014 to 128 in 2015) and Switzerland at 36% (from 109 in 2014 to 148 in 2015). Country Number of new cases in 2015* Belgium 428 Germany 363 United States 289 Luxembourg 212 France 173 Switzerland 148 Canada 130 Netherlands 128 United Kingdom 115 Sweden 92
Take aways BEPS implementation is a reality: The last big step will be the entry into force of the Multilateral Instrument (expected 2019/2020) How many stakeholders have a more or less comprehensive understanding of what the relevant changes for them are? How many have determined or are determining how to address these changes? The future tax environment will bring much more transparency The changes in environment will lead to changes in the government-to-government relationships and the relationship between taxpayer and government
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U.S. CorporateTax Reform: Current State of Play Fred R. Gander Luxembourg 21 March 2017
Intro Right now, American companies are taxed at one of the highest rates anywhere in the world. My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. It will be a big, big cut. At the same time we will provide massive tax relief for the middle class. We must create a level playing field for American companies and our workers. Have to do it. Currently when we ship products out of America, many other countries make us pay very high tariffs and taxes. But when foreign companies ship their products into America, we charge them nothing or almost nothing. President Trump, Address to US Congress, February 28 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 2 Document Classification: KPMG Public
Program agenda 1 U.S. corporate income tax reform The state of play Observations Overview of House of Representatives Blueprint Factors affecting outcomes Possible process/timing for enactment of legislation 2 Modeling 3 4 U.S. inbound company-specific considerations Loss of deduction for imports Full expensing Interest expense disallowance Mandatory repatriation Action steps 5 Potential implications for Luxembourg 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 3 Document Classification: KPMG Public
U.S. Corporate Income Tax Reform
Tax reform The state of play For the first time since 2006, the Republican Party (GOP) control the House, Senate, and White House simultaneously. In the intervening decade, the urgency for tax reform, long a GOP priority, has increased for a number of reasons: The United States now has the highest statutory corporate rate in the Organisation for Economic Co-operation and Development (OECD). Gross domestic product (GDP) growth continues to lag behind historical averages The U.S. manufacturing sector continues to decline. The development of the base erosion and profit shifting (BEPS) recommendations puts effective rate pressures on U.S. multinationals. The European Commission s State Aid cases cast doubt on the predictability of the global tax system. Significant migration of business income into partnerships and other pass-through has eroded the U.S. tax base. Corporate inversions further erode the tax base and raise questions of fairness. Speaker of the House Paul Ryan was a driving force behind the development of the House GOP Blueprint on Tax Reform released in June 2016. Donald Trump s campaign tax plan borrowed heavily from the Blueprint s concepts, suggesting at least some consensus between the incoming Administration and Congressional Republicans. 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 5 Document Classification: KPMG Public
Tax reform Observations The House GOP Blueprint (released June 24, 2016) is the likely starting point for tax reform. The Blueprint would make a number of dramatic changes to the tax code, largely pushing the tax system closer to a consumption-based tax. Many of the Blueprint policy choices are intended to encourage GDP growth. The Blueprint is designed, in theory, to be revenue neutral that necessarily involves revenue trade-offs that create the possibility of winners and losers. Failure to achieve revenue neutrality could undercut support for reform on both sides of the aisle. Achieving passage in the Senate will be a complex task for both procedural and political reasons. 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 6 Document Classification: KPMG Public
Senate 2017 Majority Leader: Mitch McConnell (R-KY) Chairman, Senate Finance: Orrin Hatch (R-UT) Democrats 48 (+2) Republicans 52 2017 KPMG LLP, US Tax a UK Services limited (London) liability partnership LLP, a Delaware and a member limited liability firm of partnership, the KPMG network and a subsidiary of independent of KPMG member LLP, firms the U.S. affiliated member with firm KPMG of the International KPMG network Cooperative of ( KPMG independent International ), member firms a Swiss affiliated entity. with All KPMG rights reserved. International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 7 Document Classification: KPMG Public
House 2017 Speaker: Paul Ryan (R-WI) Chairman, Ways and Means: Kevin Brady (R-TX) Democrats 194 (+6) Republicans 241 2017 KPMG LLP, US Tax a UK Services limited (London) liability partnership LLP, a Delaware and a member limited liability firm of partnership, the KPMG network and a subsidiary of independent of KPMG member LLP, firms the U.S. affiliated member with firm KPMG of the International KPMG network Cooperative of ( KPMG independent International ), member firms a Swiss affiliated entity. with All KPMG rights reserved. International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 8 Document Classification: KPMG Public
Possible process for action on tax reform The House The Senate Conference Signature Ways and Means releases tax reform draft Ways and Means Chairman releases Chairman s mark and/or modified mark Ways and Means marks up tax reform bill, including amendments Full House of Representatives passes bill approved by Ways and Means (further amendments unlikely) House bill sent to Senate Senate Finance releases mark (could be similar to or different from House bill) Senate Finance Chairman releases modified mark Senate Finance marks up its own tax reform bill, including amendments Full Senate considers bill approved by Senate Finance (further amendments possible) If bill achieves 60 votes, then to conference with the House Alternatively, budget reconciliation vehicle to achieve Senate approval Senate considers policy changes to conform with Budget Reconciliation rules House and Senate call for conference to reconcile differences between the two versions of the bill House and Senate Republicans and Democrats appoint conferees to negotiate conference report If conferees resolve their differences, the negotiated Conference Report sent back to House and Senate for approval No amendments to Conference Report permitted Senate may achieve 60 votes or 51 (via Reconciliation) for passage If approved, the bill is sent to President Conference report sent to President for signature, veto, or no action Treasury and Internal Revenue Service begin process of implementing the new law 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 9 Document Classification: KPMG Public
The House Blueprint Transition rules Intended to be revenue neutral Lower rate 20% Moving from an income tax to a consumption tax Consumption features Immediate expensing of investment costs (e.g., tangible and intangible assets, but not land) No deduction for net interest expense Net operating losses ( NOLs ) - Not carried back - Carried forward indefinitely - Indexed for inflation - Can offset only 90% of ATI in a given year Wages are deductible (not a traditional consumption tax feature) Cash method accounting 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 10 Document Classification: KPMG Public
The House Blueprint (cont.) Border adjustable Significant revenue raiser Tax jurisdiction focuses on a U.S. trade or business Tax base comprised only of business transactions with other U.S. taxpayers - In the base business expenses (including cost of goods sold ( COGS )) paid to and business income from other U.S. taxpayers - Out of the base business expenses (including COGS) paid to and business income from non-u.s. taxpayers - Generally favors exports over imports, including within the value chain Territorial tax system Services and royalties effectively treated like a sale of goods so need to determine payor jurisdiction Foreign subsidiary earnings not taxed Eliminates Indirect FTC Transition tax on old earnings - 8.75% on cash/3.5% on non-cash property - 8 years to pay tax (appears to apply to cash and non-cash liabilities) 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 11 Document Classification: KPMG Public
The House Blueprint (cont.) No requirement that states follow federal tax treatment State tax considerations 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 12 Document Classification: KPMG Public
Modeling
Tax reform Factors affecting outcomes Factors suggesting lower tax burden Factors suggesting higher tax burden High number of domestic suppliers, foreign customers Asset-intensive business Low-leverage business model High number of foreign suppliers, domestic customers Multinational with significant cross-border financing High-leverage business model Domestically domiciled IP Tax burden currently determined largely by the statutory tax rate Value chain relies on imports from foreign affiliates Currently manage tax burden via heavy use of deductions, credits, preference items, and other incentives and special rules 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 14 Document Classification: KPMG Public
Example 1: Retailer Disallowed deductions for imported costs drives higher cash tax under Blueprint Form 1120 U.S. Corporation Income Tax Return 2018 Line Item Description 2018-GAAP 2018- Current Regime 2018- House Blueprint Difference 2018-GAAP FX Adjusted 2018- House Blueprint 1a Gross receipts or sales........... 1a $ 420 $ 420 $ 399 $ (21) $ 416 $ 399 2 Cost of goods sold (attach Form 1125-A).... 2 250 250 100 (150) 220 100 3 Gross profit. Subtract line 2 from line 1c..... 3 170 170 299 129 196 299 5 Interest................ 5 3 3 3-3 3 11 Total income. Add lines 3 through 10...... 11 175 178 305 127 201 305 12 Compensation of officers (see instructions attach 12 $ 10 $ 10 $ 9 $ (1) $ 10 $ 9 13 Salaries and wages (less employment credits)... 13 30 30 28 (2) 30 28 18 Interest................. 18 10 10 3 (7) 10 3 20 Depreciation from Form 4562 not claimed on Form 20 5 5 13 8 5 13 22 Advertising............... 22 10 10 10-10 10 26 Other deductions............. 26 45 39 51 12 45 51 27 Total deductions............. 27 110 104 114 10 110 114 28 Taxable income before net operating loss deduction 28 65 74 191 117 90 191 30 Taxable income. Subtract line 29c from line 28 (see 30 $ 74 $ 191 $ 117 $ 191 34 Amount owed. If line 32 is smaller than the total of 34 25 38 13 38 Mandatory Repatriation Tax Payable Over 8 Years Total Taxes Paid $ - $ 5 $ 5 $ 5 25 44 19 44 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 15 Document Classification: KPMG Public
Example 2: Technology Exporter Excluding repat tax, Company generates significant U.S. tax losses under Blueprint Form 1120 U.S. Corporation Income Tax Return 2018 Line Item Description 2018-GAAP 2018- Current Regime 2018- House Blueprint Difference 2018-GAAP FX Adjusted 2018- House Blueprint 1a Gross receipts or sales........... 1a $ 500 $ 500 $ 300 $ (200) $ 460 $ 300 2 Cost of goods sold (attach Form 1125-A).... 2 340 340 323 (17) 337 323 3 Gross profit. Subtract line 2 from line 1c..... 3 160 160 (23) (183) 123 (23) 5 Interest................ 5 3 3 3-3 3 11 Total income. Add lines 3 through 10...... 11 165 168 (17) (185) 128 (17) 12 Compensation of officers (see instructions attach 12 $ 10 $ 10 $ 9 $ (1) $ 10 $ 9 13 Salaries and wages (less employment credits)... 13 30 30 28 (2) 30 28 18 Interest................. 18 20 20 3 (17) 20 3 20 Depreciation from Form 4562 not claimed on Form 20 15 11 23 12 15 23 22 Advertising............... 22 10 10 10-10 10 26 Other deductions............. 26 45 39 51 12 45 51 27 Total deductions............. 27 130 120 124 4 130 124 28 Taxable income before net operating loss deduction 28 35 48 (141) (189) (2) (141) 30 Taxable income. Subtract line 29c from line 28 (see 30 $ 48 $ (141) $ (189) $ (141) 34 Amount owed. If line 32 is smaller than the total of 34 17 - (17) - Mandatory Repatriation Tax Payable Over 8 Years Total Taxes Paid $ - $ 3 $ 3 $ 3 17 3 (14) 3 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 16 Document Classification: KPMG Public
U.S. Inbound Company Considerations
Considerations for U.S. Inbound Companies Loss of deduction for imports Adverse impact on companies selling to U.S. persons with significant foreign inputs How to Minimise Adverse Treatment of Imports - Assess existing supply chains, operating models and pricing strategies - Alter location of principal functions - Potential shift of supply chain activities to the U.S. Full expensing Incentive to bring IP and principal functions to U.S. Consider pre-reform inbounding into the U.S. of capital equipment to potentially enable recovery of cost of capital Consider pre-reform potential inbounding into the U.S. of IP to potentially enable ability to claim amortisation deductions - Foreign exit taxes may be incurred so need to consider foreign tax credit planning 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 18 Document Classification: KPMG Public
Considerations for U.S. Inbound companies (cont.) Interest expense Mandatory repatriation Repatriation provision references Camp s repatriation proposal as a starting point - Camp s repatriation proposal would have subjected any U.S. shareholder that owned 10% of a foreign corporation to a deemed repatriation of the corporation s undistributed and untaxed post-1986 foreign earnings for the last tax year of the foreign corporation which began before the year in which the participation exemption system would have applied. Notably, includes both CFCs and 10-50 companies Minimisation of Deemed Repatriation Tax - E&P Studies - Foreign E&P Management 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 19 Document Classification: KPMG Public
Action Steps
Action steps Tax reform in 2017 2018 remains uncertain but prospect for significant change is higher than at any time in 20 years Taxpayers should engage with Congressional tax-writers now to make sure concerns are heard and understood Consider the following action items: 1. Analyse flow of goods, services, royalties, and apply a border adjustable approach 2. Develop high-level economic model of effect on the company s tax position and business results 3. Consider advocacy priorities and reasonable legislative options 4. Develop transition rule strategies (e.g., grandfathering rules for existing debt) 5. Identify pre-reform planning including accounting methods review and E & P strategies 6. Consider restructuring cross-border debt to avoid no deduction/full inclusion 7. Evaluate DTA/DTL book impact of the legislation 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 21 Document Classification: KPMG Public
Potential Implications for Luxembourg
U.S. corporate tax reform Some potential implications for Luxembourg and EU Border adjustability feature likely to create variety of supply chain repercussions: Companies likely to consider inbounding IP into the US but Luxembourg exit-tax exposure and other considerations such as new US participation exemption rules may significantly mitigate the incentive. Exemption of export sales income (along with related expenses being deductible) likely to decrease use by US groups of non-us sales companies and manufacturing operations when feasible. Exemption of export services income may cause migration of shared services centers to US. Elimination of net interest expense deductibility likely to greatly curtail (eliminate) use of Luxembourg financing structures for US borrowers. Participation exemption elimination of lock-out effect likely to reduce significantly amount of earnings US multinationals invest off-shore or leave in controlled subsidiaries. 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 23 Document Classification: KPMG Public
U.S. corporate tax reform Some potential implications for Luxembourg and EU When all of the fog lifts, US groups should still have strong incentives to minimize non-us income taxes to reduce global ETR by utilising low-tax jurisdictions to the extent feasible and consistent with overall corporate tax strategy/responsibility concerns. Use of Luxembourg/EU holding companies by US groups should still be beneficial to access parent/subsidiary directive etc. How will EU respond e.g., no deduction in Europe for royalties paid to US since income is exempt, lower corporate income tax rates, higher/broader exit taxation on asset migration? 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 24 Document Classification: KPMG Public
U.S. Tax Reform Resources
Tax Reform Publications House GOP Tax Reform Blueprint House Ways and Means Committee Website on Tax Reform KPMG: Initial Observations on Blueprint KPMG: Trump Tax Plan - Blueprint Comparison KPMG: Tax Reform Process FAQs 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 26 Document Classification: KPMG Public
With us today Fred Gander U.S. Partner in Charge U.S. Tax Practice in Europe Tel: +44 (0)20 7311 2046 Email: fgander@kpmg.com 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 27 Document Classification: KPMG Public
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Notice The content presented in this presentation is for discussion purposes only and is not intended to be written advice concerning one or more Federal tax matters within the scope of the requirements of section 10.37(a)(2) of Treasury Department Circular 230. To the extent that you decide to act, or not to act, based on any information contained in this presentation you acknowledge that the information was prepared based on facts, representations, assumptions, and other information you provided to us, the completeness and accuracy of which we have relied on you to determine. In addition, the information contained herein is based on tax authorities that are subject to change, retroactively and/or prospectively, and any such changes could affect the observations made or any conclusions reached that are contained herein. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The advice or other information in this document was prepared for the sole benefit of KPMG s client and may not be relied upon by any other person or organisation. KPMG accepts no responsibility or liability in respect of this document to any person or organisation other than KPMG s client. Any advice in this document is preliminary in nature and is should not be construed as final. In various parts of the document, for ease of understanding and as a stylistic matter, we might use language (such as should ) that could suggest that we reached a final conclusion on an issue. Such language should not be so construed. No inference should be drawn on any matter not specifically opined on. 2017 KPMG US Tax Services (London) LLP, a Delaware limited liability partnership, and a subsidiary of KPMG LLP, the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 29 Document Classification: KPMG Public
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Globalization vs National Sovereignty US and European Tax Policy Javier Lasso Peña Head of Tax Americas & Asia March 21 st 2017
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Globalization vs National Sovereignty Reduction of domestic policy options Increased delegation of authority to international organizations Creation of international law that reinforces above two trends Does globalization reduce the available policy options for domestic policy makers? 3
Globalization & International Taxation OECD and United Nations OECD and G20 EU - Model Tax Conventions - BEPS - State Aid - ATAD One - ATAD Two - OECD Multilateral Instrument - Double CTB - Triple CTB 4
National Sovereignty & International Taxation For decades UK and USA advocated for global/regional rulesbased regimes. Are times changing? Brexit Border Adjustment Tax? Who will follow? 5
Issues To Keep An Eye On Legal uncertainty Impact on supply chain models Exit taxation PE Arm s length principle under pressure Forex volatility management Hybrids resulting from local rules 6
Issues To Keep An Eye On (Cont.) DTA (changes in tax rates and limitation in use of NOLs) Not binding MAPs GAAR and LOB Unforeseen consequences of transparency (CbC reporting, TP master file, exchange of information) Etc. 7
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