International tax services: Financial services

Dynamic, diverse, and highly experienced in helping financial services organizations with their international tax structuring.

Approaching your issues with an integrated perspective

Our International Tax Services financial services team is dedicated to financial services organizations and helping clients solve their business and tax issues in a regulated financial environment. With a dedicated global team of experienced specialists in financial services tax, business transformation, and regulatory constraints, we can help you navigate:

  • complex international tax environment, 
  • stringent capital requirements, 
  • risk management considerations, 
  • management of operational tax risks, 
  • tax implications of investing in different jurisdictions, 
  • and enhanced reporting requirements.

Our team has a deep knowledge and practical understanding of the financial services industry and our client base is broad, ranging from large wholesale and retail banks to investment banks, broker-dealers, custodians, exchanges, and rating agencies that carry out their operations worldwide. This means you will be working with people who understand your business and the issues you face.

Our core areas of focus include:

  • Structural alignment. We assist our entities in developing financing structures for their local operations that permit a tax-efficient deployment of capital within a global organization, taking into account tax, commercial, and regulatory constraints. For US multinationals, we have assisted in developing structures that achieve local financing objectives and permitting flexible redeployment of earnings.

  • Tax-efficient financing. We help our entities develop sustainable, improved business models that work not only from a global tax perspective, but also from a local tax, transfer pricing, and tax accounting perspective. We work closely with our entities to identify key value drivers, undertake pricing analysis to price/value the components of the business, develop a range of conceptual operational models with associated tax savings, and evaluate transition issues and mitigation opportunities.

  • Attribute management in the face of legislative change. We team with entities to address the challenges of attribute management (e.g., excess foreign tax credits or limitation, NOLs, etc.) in light of recent major legislative changes such as the TCJA and the continually evolving tax landscape in the United States and abroad. For instance, with PwC's assistance, entities are able to make fully-informed decisions regarding steps to obtain a cash or financial statement benefit for foreign taxes that otherwise may have been trapped in the branch basket or would have expired under the GILTI regime. 

  • Resilience in the face of uncertainty. In light of ongoing change in the US and international tax landscape, our entities are faced with new business and tax demands, and are being asked to accomplish more with fewer resources. For example, many of our entities are faced with the challenge of mapping out and analyzing the interaction of numerous complex provisions that were added or modified by the TCJA, and corresponding regulations, along with accelerating global tax law changes, and other developments. Our team has the tax technical experience and tools necessary to help clients process data into distilled decision drivers and implement practical solutions to drive efficiency.

Our dedicated team assists US and non-US multinational insurance companies in navigating legislative changes and the current financial environment. Drawing on our global network of over 50 insurance partners operating in all worldwide regions, we provide comprehensive cross-border solutions. Our extensive experience includes traditional topical areas as global structural and profit alignment, cross-border mergers and acquisitions, worldwide treasury management and cash deployment and financing, and tax attribute employment. We also assist companies in managing their US tax nexus risk, transfer pricing and IRS controversy assistance.

Prudent financial risk management is a critical element of an insurance company’s success. Our financial services professionals are dedicated to navigating the rules governing the tax treatment of the wide variety of financial products that are employed by insurance companies. Corporate treasury departments devote significant resources to developing transactions that hedge the risk of adverse fluctuations in currency exchange rates, interest rates, and equity prices and taxes are often overlooked when benchmarking the success of a treasury function’s hedging activities. Poorly structured hedging and other transactions can give rise to income or expenses for tax purposes that cannot be offset against taxable income or expense arising from the transaction being hedged. The resulting timing, character and source whipsaws are frequently of a magnitude that is disproportionately large when compared to the amount of actual net economic income or loss arising from the combined transactions. Our team works with treasury departments to reduce the conflicts between their non-tax objectives and the underlying maze of tax rules.

A key priority for insurance companies is reputation risk, and at present worldwide tax nexus risks are drawing scrutiny from all corners of the globe. Equally important to insurance companies is the return on their funds’ investments. Tax costs can have a material adverse effect on the return on investment but are frequently overlooked by non-tax investment managers. Our global team maintains constant review of all evolving worldwide investment tax positions regarding liquid and illiquid equity, debt, commodities, derivatives and other investment vehicles and helps insurance companies to manage their funds’ tax costs.

We advise clients on a broad range of international structuring issues, most of which are geared towards managing the level of tax risk for investment funds and management companies and enhancing post-tax returns for investors by reducing tax leakages.

With the significant increase in audit activity from foreign tax authorities, funds should focus on applying a more global holistic planning approach. PwC’s global reach, specialist focus and integrated tax approach have been factors in reaching the market leading position as advisors to the real estate funds sector. We can assist you in reviewing your global tax and permanent establishment risk for your funds and management company. We can assess any prevailing permanent establishment, nexus and residency exposures for your various funds, carry vehicles, and other offshore entities in the jurisdictions in which you operate and can advise on best practice methodologies to help reduce global tax risk.

ITV is a comprehensive database of withholding and capital gains tax rates for over 130 jurisdictions that includes detailed commentary of the domestic tax treatment of income derived from 14 asset classes. In addition, it also provides withholding and refund procedures, domestic filing obligations and commentary on the country’s approach to obtaining double tax treaty relief for over 44 specific fund vehicles.


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Thomas Groenen

Thomas Groenen

US International Tax Financial Services Leader, PwC US

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