RSM Voice of Tax & International Trade | MAY 2024
Dear reader,
Welcome to the May edition of the "Voice of Tax & International Trade." In this issue, we are excited to present six compelling articles that delve deep into the dynamic world of tax and international trade.
We kick off with an insightful examination of?The Importance of Tax Integrity for Internationally Active Organizations,?a must-read for those navigating the complexities of global business. Following that, we explore the?Impact on Technology and Defense Sectors with the European Economic Security Strategy,?offering a unique perspective on recent developments.
Our journey continues with a look at?ESG, Value Creation, and Transfer Pricing: How Do They Fit Together??This piece provides a fresh view on integrating environmental, social, and governance factors into economic strategies. The fourth article addresses?The Growing Importance of Bringing Tax Governance to a Global Level,?emphasizing the need for more robust frameworks in our interconnected economies.
We then delve into?The Interplay Between ESG and Intercompany Financing in Transfer Pricing,?which sheds light on how these critical elements interact within financial frameworks. Lastly, we provide an update on?BEPS Pillar 2 and the Various Data Demands,?keeping you abreast of the latest in base erosion and profit shifting initiatives.
Thank you for your continued interest and support. We hope you find these articles both informative and thought-provoking.
Kind regards,
Mario van den Broek?
RSM Netherlands Tax & Business Consulting Services
The importance of tax integrity for internationally active organizations
In recent years, there has been an increasing focus on Environmental, Social, and Governance (ESG) factors in the corporate world. As companies strive to demonstrate their commitment to sustainability and social responsibility, attention has turned to every aspect of their operations,including tax practices. Tax integrity, or the fairness and transparency of tax payments, is now under the ESG spotlight, and for good reason.?
The European Economic Security Strategy: The Impact on Technology and Defense Sectors
In the wake of increasing geopolitical tensions and rapid technological advancements, the European Commission has recently unveiled communication detailing the European Economic Security Strategy, which was published in 2023.The approach focuses on enhancing the security protocols around sensitive technologies and sectors by strengthening the control over the export and transfer of critical technologies and capital. This article outlines the framework for a series of forthcoming regulatory and policy updates under this strategy, exploring its implications especially for companies operating in advanced technology, military, dual-use, and other critical sectors.
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ESG, value creation and transfer pricing. How do they fit together?
The European Commission has intensified its efforts to integrate Environmental, Social, and Governance (ESG) principles into business regulations. Multinational companies vary widely in their reactivity and willingness to integrate ESG principles into their existing operating and business models; some do the bare minimum, whilst others completely rethink, reshape and redesign their business model around ESG principles. ESG initiatives have the potential to materially impact value creation, a core principle that must be considered when designing a transfer pricing model. This article focuses on ESG initiatives, their impact on value creation and how they should be considered from a transfer pricing perspective.?
The growing importance of bringing Tax Governance to a global level.
In recent years,the global tax landscape has witnessed a significant transformation driven by concerted efforts from international bodies such as the OECD, the EU, and the UN. The focus is on combating tax base erosion, creating more tax transparency, and adapting tax systems to modern digital economies. Multinational entities’ (MNEs) tax departments will face in the next decade more tax compliance obligations in the international arena. Tax departments will need to prepare themselves for that to be more in control, not only on a national level but also on a multi-jurisdictional level. New global tax policy initiatives will require that MNEs be able to collect in an automatized manner and verify tax data from group companies in multiple jurisdictions to calculate the correct tax exposure. To become a tax department of the future investing in your global tax governance is paramount in the upcoming decade. ?
The interplay between ESG and Intercompany financing
As stakeholders increasingly demand sustainable practices, companies are compelled to integrate Environmental, Social, and Governance (ESG) factors into their operations. Thus, integrating ESG considerations into transfer pricing is no longer optional – it's essential. In this article, we specifically discuss the interplay between ESG and intercompany financing.
BEPS Pillar 2: Navigating Data Demands
Pillar 2 compliance is essential, demanding intricate data management across jurisdictions and offering an opportunity for tax teams to improve processes with technology. Prompt action and strategic tech adoption are key to navigating these complex requirements effectively. With the onset of BEPS Pillar 2 regulations effective from January 1, 2024, businesses worldwide are facing a new set of compliance challenges and opportunities. This regulation, aimed at ensuring that multinational enterprises pay a minimum level of tax, necessitates a comprehensive understanding and strategic approach to data management and compliance processes.
If you have any questions regarding these articles, or have an inquiry for?our team of Tax and Consulting experts, please contact:
Mario van den Broek ([email protected]?-?+31 6 15 83 55 00)