Synopsis Day 2
About PwC Thailand’s 2018 Symposium (19 October 2018)
Synopsis – Managing the legal and tax challenges to unleash corporate growth
The world economy is shifting to more diverse platforms both online and offline. MNCs are now moving out of survival mode and focussing once more on growth and opportunities. They are contemplating unleashing corporate growth by expanding locally and overseas through acquisitions and into cyberspace.
As a result of this, the government is looking at ways of changing the long-established principles governing law and taxation. These changes will affect businesses. More than ever before, businesses need to understand their tax risks and adopt the right strategies to manage their tax costs. So it’s important to be aware of the changes and their impact as well as how to manage disruption to business models, and harness opportunities. For example, risks arising from acquisitions, costs recharged to overseas subsidiaries, or transfer pricing between related parties are becoming more challenging and may be subject to scrutiny by the tax authorities.
Apart from tax, the legal area also needs to be looked at. The exposures associated with operating a business on or offline without a proper licence can be far-reaching. This is because the government authorities are introducing stricter mechanisms to respond to and investigate detected failures to comply with the laws.
We’ll look at what each authority is pushing for, and how this might have an adverse impact on your business. ‘Winning through awareness’ will be key. Our speakers will share their valuable insights into these issues and other current business trends. We hope you’ll find our conference invaluable and we look forward to seeing you there.
Getting your transfer pricing practices ready for impending scrutiny
Thailand’s new transfer pricing legislation is expected to be enacted before the end of this year.
In this session, you’ll get the latest updates on the draft transfer pricing provisions and their status. You’ll also learn how to gauge your company’s readiness for the impending scrutiny of the Revenue Department and for preparing effective transfer pricing documentation from real life cases demonstrating the correct and incorrect transfer pricing practices.
If enacted this year, the new transfer pricing law will apply to accounting periods beginning on or after 1 January 2019. The Revenue Code will explicitly require related party transactions to be at arm’s length – a change from the current requirements for transactions to be at market price. Transfer pricing disclosure will also become mandatory when filing the FY 2019 tax returns in 2020. The new law will also require you to maintain comprehensive transfer pricing documentation.
This means that MNCs meeting the conditions for disclosure must be ready for the Revenue Department’s increased visibility to their transfer pricing practices by the end of this year at the latest. Being ready will involve adopting the correct transfer prices and having robust transfer pricing documentation in place.
Managing the risks in M&A transactions
One way to achieve a fast growth in a business is to engage in M&A (either in a share or asset deal). When immediate growth for a business is desired, this can be the best option to provide instant results. However, an M&A transaction must be done correctly. Combining the results of two businesses has its own challenges. To achieve your strategic objectives through acquisitions, you will need to identify and effectively manage the transaction risks. Our tax M&A experts will explore the management of these risks. They will give you practical examples of how and why risks arise during acquisitions and the consequences that can arise if they are not appropriately managed.
In this session, we’ll also explain how to use risk management tools effectively. We’ll examine the tools available and give examples of managing risks through the deal process and how these tools can be used effectively for due diligence and deal structuring. Issues to be aware of when a business is expanded cross-border will also be explained.
Detecting acts not in compliance with the law when using e-documents and paper documents submitted to the authorities
Nowadays, with the development of technology continuing unceasingly, various new transaction methods are being introduced into the commercial world.
Technology provides a choice of platforms on which to operate a business, and these are regulated and monitored closely by the relevant authorities and often need a permit or licence. The rapid pace of change means there is a risk that you overlook the regulations which will lead to non-compliance.
In view of the efforts of the government authorities to create and enforce stricter mechanisms to respond to and investigate issues of non-compliance with the laws they enforce, the legal implications and exposures associated with doing business without the correct permissions can be far-reaching.
One of the investigation tools used by the authorities to detect non-compliance is an examination of those documents you routinely submit over-the-counter and online, e.g. audited financial statements, BOI progress and annual operation reports and tax returns for the payroll. These documents usually contain important information that your staff should be familiar with but may overlook. Therefore, enabling your own staff to detect and identify any potential non-compliance with the law in your business at an early stage is a cost-effective way to mitigate future risks.
This session will give you guidelines on (i) getting to know the updated laws and regulations relating to online transactions and (ii) how to initially identify a failure to comply with the law from the documents filed before your company encounters any adverse consequences. The key focus will be on the consequences of failure to comply with laws, including cyber laws, the draft data protection law, foreign business law, investment promotion law, company law, and the labour law. The session will also cover how to detect and prevent internal frauds.
Managing challenges to tax operations resulting from changes in the business environment
In recent years, the challenges posed by an increasingly complex and fast-changing business world have brought about major changes in the way firms do business. For an organisation to keep growing it’s essential it reacts well to these changes. However, tax operations are often overlooked and this can impact the bottom line.
For example, if the marketing risk of the distributor shifts to the principal, making marketing expenses reimbursable, it then becomes necessary to clearly understand whether the charges are for reimbursements of expenses or are in the nature of service fees.
Or, if you recharge your overseas related companies for management services, you need to know the correct process and what documentation is needed to qualify for the zero rate of VAT.
These kinds of issues can lead to unavoidable tax exposures if wrongly determined. Now is the time to revisit your tax operations and find the previously hidden risks.
