In the last five years, there has been an ever-increasing focus on the taxation of multinationals, fuelled by a global drive to increase transparency, improve the cohesiveness of corporate tax across territories and, critically, to align taxation with value creation. Amid growing pressure from multiple stakeholders, the OECD’s BEPS project initiated in 2015 was the catalyst for change, and its recommendations on 15 actions have underpinned significant global legislative change.
The article below (first published in Tax Journal) examines key existing tax considerations for global operating models, including the UK’s diverted profits tax, withholding tax issues on royalties allocable to permanent establishments, the UK’s anti-hybrid and offshore receipts in respect of intangible property rules, transfer pricing, permanent establishment and residence. It then assesses the key UK tax issues associated with restructurings that seek to ensure that the operating model is sustainable and aligned to business strategy. The impact of Brexit, digital taxes and the OECD’s two pillar proposals is also considered, and the commentary highlights the increasing importance of considering international tax, transfer pricing and indirect taxes holistically.
