Mastering tax complexity

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Tax is getting exponentially more complex, both as regulation increases and as new types of funds are sold globally across borders. In the future, we believe that how asset management companies deal with tax risk and complexity will become a critically important differentiator. This will affect both how successfully firms sell their funds across borders and their broader competitiveness.

We clearly see asset managers becoming more influential from 2020 and beyond. Tax authorities have already begun to focus on them more than ever. Our new paper in the 2020 series: Transforming your business for a new global tax world, published in September 2015, foresees tax transparency becoming a fact of life in the financial markets of 2020 and beyond. Fund product taxation will become a key battleground.

In our view, asset management firms will need to respond to these challenges by galvanising their tax functions. The tax function will play a key role in the management of operational risks. Highly-skilled tax people will be brought into the heart of the business. Tax technology will help to optimise investment performance by minimising tax leakage, while tax branding will move to the heart of marketing and reputation.

The other articles in this issue show how the asset manager's tax world is already becoming more complex. As fund passporting becomes reality in Asia, there are great opportunities to grow assets. But we explain how success will depend at least partly on tax issues. Similarly, turning to Europe where the UCITS fund passport has transformed distribution over the past 30 years, we highlight the need for a deep understanding of the ever-changing tax requirements.

And then there's BEPS. Base Erosion and Profit Shifting (BEPS) is a particular issue for managers of alternative funds. We explain how it impacts managers - from the investor to the portfolio company and management company structure. In a related article, we report on the OECD's release of model documents for country-by-country reporting.

These articles are extracts from our recent thought leadership reports. They showcase the views of our specialists around the world on ever-increasing tax complexity. If you want more detail, we've included links to the original reports. We hope you find these articles thought-provoking and helpful. Please don't hesitate to get in touch if you would like to speak to me, or any of my colleagues in our network.

Contact us

William Taggart

Global FS and Asset & Wealth Management Tax leader, Partner, PwC United States

Tel: +1 (646) 471 2780

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