Firstly, tax leaders need to understand the impacts of the BEPS 2.0 proposals and start devising a strategic response and clear roadmap to ensure compliance linked to these changes.
It is critical to identify how BEPS 2.0 will affect your organisation — both its profit reallocation proposals (known as Pillar One) and its global minimum tax measures (known as Pillar Two). Responding to the changes could present a new set of pressures in your finance department, including new demands for internal resources, revamping tax policies and investing in new technology to handle new compliance obligations.
As we move towards the final consensus position in the summer, there are several areas still to be worked through, such as how to avoid ring fencing and how to ensure simplification and ease of administration of the rules. It is essential for Heads of Tax and Transfer Pricing professionals to follow the developments closely.
Some key considerations in the coming months:
Businesses need to continue to be involved in the representations and the stakeholder engagement. Think about how it might affect your business and your value chain and really stay on top of this across your global footprint. Also, key actions to take:
- Understand how the impact of the rules are modelled out in detail and all business touchpoints are identified
- Create a clear road map within the organisation for compliance
- Prepare for potential system changes and new process implementation
- Engage with stakeholders to work out the impact on Effective Tax Rate (ETR) and Earnings Per Share (EPS)
For further information please visit: Taxing the digitalisation of the economy or contact your usual KPMG contact