Business consulting services
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
Business process solutions
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
Business risk services
The relationship between a company and its auditor has changed. Organisations must understand and manage risk and seek an appropriate balance between risk and opportunities.
As organisations become increasingly dependent on digital technology, the opportunities for cyber criminals continue to grow.
Forensic and investigation services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
Mergers and acquisitions
Globalisation and company growth ambitions are driving an increase in M&A activity worldwide. We work with entrepreneurial businesses in the mid-market to help them assess the true commercial potential of their planned acquisition and understand how the purchase might serve their longer- term strategic goals.
Recovery and reorganisation
Workable solutions to maximise your value and deliver sustainable recovery
Transactional advisory services
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
The International Financial Reporting Standards (IFRS) are a set of global accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements. At Grant Thornton, our IFRS advisers can help you navigate the complexity of financial reporting from IFRS 1 to IFRS 17 and IAS 1 to IAS 41.
Audit quality monitoring
Having a robust process of quality control is one of the most effective ways to guarantee we deliver high-quality services to our clients.
Global audit technology
We apply our global audit methodology through an integrated set of software tools known as the Voyager suite.
Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
Direct international tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
Indirect international tax
Using our finely tuned local knowledge, teams from our global organisation of member firms help you understand and comply with often complex and time-consuming regulations.
Innovation and investment incentives
Dynamic businesses must continually innovate to maintain competitiveness, evolve and grow. Valuable tax reliefs are available to support innovative activities, irrespective of your tax profile.
Private client services
Our solutions include dealing with emigration and tax mitigation on the income and capital growth of overseas assets.
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
Tax policies are constantly evolving and there are a number of complex changes on the horizon that could significantly affect your business.
The OECD’s latest proposals on taxing digital business pull back from the radical roadmap put forward in May to something much closer to the January policy note by proposing a modified residual profit split with benchmarking of routine profits.
What then do the latest OECD proposals say, what do they leave open and what are the risks that need to be addressed?
Download Cloudy with a chance of complacency for more insight [ 188 kb ]
Download full article
OECD roadmap key developments
Some of the latest key developments include narrowing the scope to large enterprises carrying out business-to-consumer (B2C) transactions. It also looks like the arm’s length principle is back from the brink, having appeared doomed under the earlier proposals, though this is only a partial reprieve.
But the sighs of relief among mid-size multinational enterprises (MNEs) are likely to be tempered by continuing uncertainty over the type of commerce covered and size of affected businesses. Moreover, anything the OECD eventually agrees will only be a recommendation, leaving governments to frame their own measures and hence heightening the risk of double taxation and dispute.
What’s been proposed?
On 9 October 2019, the Organisation for Economic Co-operation and Development (OECD) launched its latest attempt to find a workable solution for these vexed digital taxation issues. After floating a radical overhaul in May, which would have caught pretty much every business in its net, the new Pillar 1 (allocation of profit and new nexus rules) proposals appear to be limited to large enterprises that deal with consumers.
The OECD has made an effort to take most small business out of the scope. This includes a combined group turnover threshold – mentioned as €750 million in line with country-by-country (CbC) reporting, but this is only a suggestion for consideration. If €750 million does emerge as the rule of thumb, a good many mid-size MNEs would be covered, rather than just the Big Tech giants. Moreover, like CbC, the door is open to individual markets to lower this, which leaves considerable concern for businesses that do not have a large tax department able to respond to the additional demands.
The OECD has also sought to retain some elements of the arm’s length principle, with a supplement for enterprises that are in scope. The suggested approach consists of a blend of residual profit and a formulaic allocation for each consumer market based on levels of sales. This could be calculated by using consolidated financial statements. The revised proposals recognise that a simultaneous implementation and an effective dispute resolution mechanism are needed to make this viable. Both in turn require a high level of agreement between jurisdictions that could have different and even competing priorities and different formulas.
What’s coming up?
Consultations are ongoing until 12 November 2019. This will be followed by a consultative meeting in Paris on 21 and 22 November. The OECD continues to target a political agreement leading to the basic tax policy architecture to be released in early 2020. This would pave the way for detailed technical work to be carried out during the year.
It’s hoped that some of the grey areas in the OECD proposals can be clarified as part of the consultations and subsequent review of responses.
What does this mean for your business?
The big shift between the OECD’s May and October proposals turn this from an economy-wide shake-up to a business specific challenge. However, the grey areas within the latest recommendations (eg the uncertain line between B2C and B2B) and how any new rules might be applied on the ground (eg lower turnover thresholds) open up the danger of assuming that you are not in the scope when you are.
Three steps your business can do now to prepare
- Model impacts of upcoming developments, not just in terms of tax paid and where, but needs and costs of compliance. As part of this assessment, it’s important to understand and plan for multiple eventualities.
- Review organisational structure and supply chains to take account of digital tax and wider developments such as tariffs.
- Reduce the growing risks of dispute by being data-ready (ie evidence-based justification rather than scrambling to respond to an investigation), beefing up documentation in areas such as transfer pricing and reducing uncertainty through steps such as advanced pricing agreements (APAs). While unilateral APAs have been less popular than bilateral or multilateral counterparts due to state aid issues or the BEPS outcome, they may come back into focus as a result of the unilateral developments in digital tax.
We hope that you found this update useful. If you would like to discuss any of the issues in more detail or if you would like assistance modelling how the proposals may affect your business, please contact one of the contacts listed in the article or speak to your local Grant Thornton office.