In the meantime, we are working with our clients to analyse and verify their operating models. It is advisable to review structures on a periodic basis and perform some form of tax ‘health check’, which arguably every structure should already be doing.

In anticipation of the new tax climate, such checks may include:

• Review of existing and proposed businesses through the lens of BEPS to determine if they are fit for purpose;
• Put in place or review transfer pricing policies and documentation to ensure they are robust, for example, for expense allocations and intra-group financing;
• Perform a risk versus reward analysis to determine if appropriate substance levels exist;
• Review financing arrangements and levels of interest deductions, to include intra-group versus third party debt levels;
• Consider existing operating structures in the light of the new definition of Permanent Establishment.