Sustainability & climate change tax services
Our sustainability & climate change tax network provides advice and support with tax issues arising from both the governmental response, such as the introduction of carbon, environmental taxes and other regulation, and from the business response, such as reorganisation or acquisition, to the sustainability & climate change agenda.In summary, we help clients cut through the complexity of different environmental policies and economic instruments around the world, advising businesses and their investors on how to improve performance, implement long-term sustainable tax strategies and understand and communicate the total tax contribution they make to society. Our human resource services team, within the network, also provides guidance on how to align recruitment, retention and reward to sustainability strategies as well as changing employee behaviours to improve engagement through making the organisation greener and reducing overhead costs.
Our sustainability & climate change tax services include the following:
Compliance – We help clients ensure that they are complying with the relevant environmental tax legislation and regulations in each of the countries in which they have a presence.
Footprint and monitoring – We help clients keep track of their own exposure to environmental taxes around the world, changes that will impact them and an understanding of why they are impacted by these rules. Working with our colleagues in Advisory, we can also help our clients change their behaviours to reduce their tax bills and become more sustainable.
Incentives – We help clients understand what incentives they are eligible for and how to structure their investments, e.g., in Clean Development Mechanisms (CDM) or Green Property, to take maximum advantage of the incentives available.
Fund structuring – Substantial sums of money are being raised in the capital markets for investment in sustainability projects in their broadest sense, e.g., CDM, green infrastructure, green property, forestry funds, etc. We have unparalleled experience in structuring investments into and out of these funds.
The carbon agenda – As the number of emissions trading schemes around the world grows and the number of our clients subject to those regimes proliferates, we can advise our clients on how the scheme rules apply to them and the interaction of the different scheme rules. We can advise on the tax implications of participating in schemes from both a direct and indirect tax perspective—including deductibility of premiums, transfer pricing implications of moving carbon credits around the group, M&A support if a group decides to acquire new technology or change its product mix to make it lower carbon and more sustainable, interaction of the group’s carbon strategy with its tax strategy (e.g., which is the best entity to purchase credits taking into account any available tax losses), etc.
Transfer pricing – We help clients address transfer pricing issues arising as a result of the green agenda—for instance, in relation to major new product costs and/or savings, the development of new products and processes, the impact on new or existing brand value, the creation or enhancement of intellectual property assets, changes to the supply chain and operating models, participation in new regulatory or trading regimes, profit changes that reflect new environmental costs and benefits and new products. We work with clients to ensure their transfer pricing policies and procedures are adaptable and can achieve the arm’s-length standard and comply with regulations. We also help clients take advantage of opportunities to structure their business models and transfer pricing policies to improve their effective tax rate.
Human resource services – We help clients re-define their people strategy in light of the increased focus on the sustainability and climate change agenda. Our people & sustainability offering encompasses leadership and employee-wide training and development, employee engagement and communication programmes, and best practices around building sustainability and climate change into reward and incentive packages and benefit schemes.
Policy consulting – We are actively engaged with governments worldwide, to consider ways in which their tax regimes can contribute to the development of a greener economy. We also make representations to government and regulators, on behalf of clients, when they are experiencing difficulties in interpreting or complying with specific environmental policies and legislation.
Financing sustainability – We have extensive experience of working with a wide range of clients investing in sustainability, including:
- Fund structuring
- Advising on investor and financier tax issues
- Advising on the management structure and carry structuring
- Investment structuring, tax modelling and due diligence
- Asset finance / leasing
- Carbon trading and carbon offset schemes
If your need to ensure that your offset scheme or asset pooling entity is tax neutral, we have extensive capital market experience.
For more information about our global sustainability and climate change tax practice, click here.