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Within the Asia-Pacific market, information technology continues to reform the tax landscape. A major talking point of the past year has been around the Chinese tax authority’s ability to interact directly with a company’s systems and the implications this has on the tax market. Tax authorities in China are now equipped for big data analysis in real time.

In response, companies need to improve their internal risk controls and enhance tax compliance capabilities. Companies will need to be careful regarding the data provided in tax filings. It will become more challenging to defend tax audits in China, and we are expecting some big audit cases to follow. Tax people will need to think more deeply, not just about the tax numbers, but about the whole value chain and about each group function. Tax teams within MNEs will also need to catch up with these changes.

As for India, the U.S. reforms will have serious ramifications for U.S. corporations with Indian subsidiaries. We are expecting 2018 to be devoted to managing sweeping U.S. tax law changes.

We are also expecting to see a continuing trend of countries shifting their tax revenue base from direct tax to indirect tax. After the implementation of a broad-based VAT in China, Malaysia, and India, the six member states of the Gulf Cooperation Council are next in the pipeline. Therefore, tax technology, or a tax-shared service center being established in an appropriate location for centralizing the VAT compliance needs of an MNE, could be a cost-effective option.

Within the Asia-Pacific market, in-house tax professionals are required to spend more time on business partnering, trying to provide optimal tax solutions and educating internal stakeholders on the limitations of aggressive tax planning in the light of various action items of BEPS working more toward a risk management role.

At BPA, we continue to have discussions with many companies across APAC on how tax departments should be structured and what the tax staff in these teams should be doing.

Contact Barrie Pallen for further information.

Barrie@bpasearch.co.uk / +44 20 3457 2625