RG TAX REFORM: WHAT IT MEANS FOR STATE AND LOCAL TAX AND FISCAL POLICY
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Transcript of Brexit and what it means for tax - · PDF fileBrexit and what it means for tax. EMA Tax...
Brexit and what it means for taxEMA Tax Summit—London, September 2016
2© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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OverviewChris MorganHead of Global Tax Policy KPMG
4© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
“Brexit means Brexit”
—Who exercises Art 50?
—Timing on negotiations
—Revocable?
5© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Potential tax & legal implications
Brexit
Direct tax implications, e.g:— Parent Subsidiary Directive— State Aid Rules, — Code of Conduct— Free movement of capital (largely) unaffectedIndirect tax implications, e.g:— Access to EUs FTAs; — Customs— VAT— EU excise duty directiveGeneral tax and legal issues, e.g:— Mutual Assistance Directive (AEoI on tax rulings, CBCR)— Arbitration Convention; — Free movement of persons— Employment law (e.g. work time directive)
i
6© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The current situation
7© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Source: Global Counsel – BREXIT: the impact on the UK and the EU
Potential exit scenarios: implicationsNorway Model
SwissModel
TurkishModel
FTA Model WTO Model
EU Direct Tax Directives applicable
Limited or no tariff barriers on trade in goods
Full access to EU Single Market
Single set of regulations for exporting firms
Rules of origin requirements avoided
EU bank passport still available
Influence over EU regulations ?
Able to adopt own approach to regulation ? ? ?
No contribution to the EU budget
State Aid not applicableAbility to negotiate trade agreements independentlyAbility to implement own immigration policy ?
8© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Tax environment: potential implications
Will there be an impact on:— Globalization process of tax matters
— G7, G20, OECD initiatives on BEPS
— How will the balance of the political powers within the EU
be influenced
— Anti-Tax Avoidance Directive
— State-Aid decisions?
— Revised CCCTB proposal (expected November 2016)
— Code of Conduct
9© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
What might the UK's tax policy be?
Sour
ce: E
urop
ean
Parli
amen
t
In conversation Robert Van der JagtChairman of EU Tax Centre KPMG
Tim PowerDeputy Director HM Treasury, United Kingdom
Under all scenarios, Brexit has customs implicationsLeon KantersChairman, Trade and Customs EMEA KPMG
12© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Magnitude of BrexitTrade of goods between UK and EU exceeds 350 billion EURO (2015):— EU exports to UK 219.8 billion EURO— UK exports to EU 133.3 billion EURO
On average 3.6 million trucks use the tunnel or ferries from or to Dover in the UK:— Transport by rail, vessel or plane or other ports are excluded
The Netherlands exports 38 billion EURO to UK (2015)— The UK exports 21 billion EURO to the Netherlands— Third and fourth important export market
13© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
EU Free Trade Agreements
14© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Case study exit scenariosCURRENT SITUATION
— Assembly location in UK— Assembled product duty rate 10%— Import components:
— Mexico 25— S Korea 25— Japan 5
— Added value UK 45— Markets:
— The Netherlands— Czech Republic— Belgium— France— USA
— Import Mexico and S Korea applying FTA— Duty paid for Japan components— IPR applied for re-export to USA— Intra community supply to EU Member States
UK
FR
B
CZ
NL
US
EU
Mexico
Japan
Korea
25
25
5
15© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Case study exit scenariosPOST-BREXIT SITUATION
— Assembly location in UK— Assembled product duty rate 10%— FTA condition 60% added value country of origin (UK)— Import components:
— Mexico 25— S Korea 25— Japan 5
— Added value UK 45— Markets:
— The Netherlands— Czech Republic— Belgium— France— USA
— Import Mexico and S Korea applying FTA?— Origin requirement UK are not met 10% duty charge— (Re) Export to EU Member States— No duty paid for Japan components and potentially for
Mexico and S Korea by applying IPR
UK
FR
B
CZ
NL
>60
US
EU
Mexico
Japan
Korea
25
25
5
16© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Client ERP
systems
DATA TAX INTELLIGENCE CENTER
REPORTS
Declaration Data
Data Cubing Monitoring
We have standard ERP extraction programs / plug-ins that extract all relevant data in the correct format. Low effort required from client IT department.
In addition we request data from clients, customs authorities, customs agents, or IT customs software providers (customs declarations software).
All data is processed in the Tax Intelligence Center where the Cubes are created and VAT, Customs & Trade and Transfer Pricing determination logic is applied to the received data.
The Tax Intelligence dashboards are populated / refreshed with the generated Cubes and are ready-to-use by the client. KPMG has over the 100 standard (exception) analyses available. Client-specific analyses are possible as well.
We make use of Global Trade Content via external sources. (e.g. Taric databases, export control, free trade agreements).
External Sources
Data Extraction
KPMG Tax Intelligence Solution to determine Brexit impact
To participate in polls, please log in to the app:
— Navigate to the particular session in the “Agenda.”— Scroll to the bottom and select “POLLS.”— Respond to the question prompts and submit your answer.
Polling
18© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Polling questions 1. How important is it for your company to have access to the various direct tax directives
—Parent Subsidiary Directive—Interest and Royalties Directive—Mutual Assistance Directive—Arbitration Convention
2. How important is it for your company to have access to the single market3. Are you thinking of relocating from the UK following Brexit:
—Head office/regional headquarters —Certain other activities
4. Should the UK actively use tax policy as an instrument of competition?5. What should the UK do about the rate of CT?
Conclusion
20© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
To give feedback on a session, please log in to the app:
— Navigate to the particular session in the “Agenda”— Scroll to the bottom and select “FEEDBACK”— Respond to the question prompts to provide feedback
Feedback
Fragmentation and controversyTax in a post-BEPS world
22© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
ContactsChristopher MorganHead of Global Tax [email protected]
Robert Van der Jagt Chairman of EU Tax Centre [email protected]
Leon KantersChairman Trade & Customs [email protected]
Tim PowerDeputy DirectorHM Treasury, United Kingdom
© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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