Corporate tax disputes

There is no doubt about it: as demands on public funds (for infrastructure, education, security, social benefits, etc.) continue to grow, national authorities throughout the EU, North America, and multiple points beyond are getting more and more serious about boosting tax yields. The problem is that, faced with (usually vociferous) public opposition to new tax increases, tax authorities are now taking another route—investigating and taking legal action against companies and organisations they think might be engaged in tax evasion. The key word here is “think” , since the threshold between tax claims and deductions that were once considered merely open to interpretation, have been lowered to a point where such tax activities might now be deemed “suspect”. And because the tax structures and mitigation processes employed by many companies are now the focus of increased official scrutiny, more and more companies—many of which have never been on the receiving end of an official investigation—are finding themselves embroiled in costly, time-consuming tax disputes. What’s more, such disputes, regardless of their eventual outcome, can have far-reaching effects on a company: its reputation and credibility can be permanently damaged.

If this is your situation

• You are a multinational company, based in the EU, but with operations in North America and Southeast Asia. The US tax authorities claim that you have underpaid taxes, even though you have proof that taxes on profits were paid in Britain. Despite there being a “double-taxation” agreement between Britain and the US, the American tax authorities say that the majority of your profits were made there. You need help resolving the dispute.
• Your national tax authorities are pressing you to enter an advance pricing agreement (APA) as part of an ongoing dispute, but you believe that this is unrelated to the case at hand and need counsel.
• Your company has some of its subsidiaries registered in the Bahamas, but these entities were the legacy of the recent takeover of a competitor. However, the authorities are now questioning the tax structures employed by these subsidiaries and consider your company responsible for their tax liabilities.
• You find that your company’s normal procedures of deducting capitalised assets—depreciation, amortisation, and other applications—are being called into question by the tax authorities. You need help clarifying your position and negotiating (possible) solutions.
• You believe that inconsistencies in your country’s tax code—the dissimilar tax approaches accorded debt and equity, versus the rules imposed on companies like yours—have led to (what could be a lengthy) conflict with the tax authorities. You require outside assistance.

How PwC can help you

At PricewaterhouseCoopers (PwC) we are the first to acknowledge that most companies will, sooner or later, face a tax dispute that will overstretch their resources, and, perhaps, create a situation that puts their market credibility and reputation into doubt. But, even if the tax dispute is not earth-shattering in scope, it can also distract you and your staff from your key business responsibilities. However, if you call us when you are embroiled in a tax dispute we can support you—locally and globally—wherever you require tax advice. We provide the technical skills of financial and tax specialists, economists, lawyers. and other in-house specialists, to help you develop solutions to your particular tax dispute. In fact, we have experience working with companies of all sizes and types—multinationals, privately-owned organisations, family businesses, and partnerships—and we can help you throughout the tax dispute process, whether in an informal forum or in litigation, mediation, or arbitration. Let us show you how we can help.