As the world economy is shifting towards more diverse online and offline platforms, MNCs are now moving out of survival mode and focussing once more on growth and opportunities.

As a result, the government is looking at ways of changing the long-established principles governing law and taxation.

Businesses need to understand their tax risks and adopt the right strategies to manage their tax costs, and crucially need to be aware of potential 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 will become more challenging and may be scrutinised by the tax authorities. Companies need to know and be prepared to adopt the right strategies to manage their tax cost and the risk that may be incurred.

On Friday, October 19, the MSV event will discuss all of these issues of which the following are the key areas that will be examined:

Most MNCs nowadays are contemplating boosting their growth potential by expanding their footprints locally and overseas through acquisitions and into cyberspace.

In order to achieve strategic objectives through acquisitions, it’s vital that MNCs are able to identify and effectively manage the key tax and legal challenges arising from acquisitions, deal executions and post-deal integration as well as how to manage risks amid the planning opportunities available to maximise their business and shareholder value.

Activities of MNCs may also create challenges for their tax operations as a result of changes in the business environment.

One key concern would be payments to related parties, since it’s one of the simplest ways of shifting profits out of a company. This is a very common technique used in tax planning.

Favourite target

However, MNCs need to be aware that these payments are a favourite target of the Revenue Department and their deductibility for corporate income tax will also be challenged. Compliance with the withholding tax and VAT laws will also be closely scrutinised.

These kinds of issues can lead to unavoidable tax exposures if wrongly determined. Now is the time to revise tax operations and discover previously hidden risks.

Furthermore, on 27 September 2018, the National Legislative Assembly passed the Revenue Code Amendment Act to introduce transfer pricing provisions. It’s expected that the law will soon be announced in the Royal Gazette for its official enactment.

Key issues in the new law will include, but are not limited to, the transfer pricing disclosures of related party transactions, minimum income thresholds and penalties for non-compliance.

So, there are notable points in the transfer pricing provisions where companies need to become ready for the impending scrutiny of the Revenue Department.

Apart from the above, another key issue that needs to be addressed is legal compliance which is a significant matter for government authorities. When conducting business, it might be sceptical whether business operators are fully compliant with the laws, such as the foreign business law, the investment promotion law, etc.

The risk of non-compliance could lead to legal sanctions and in the worst-case scenario, business disruption or even cessation.

Furthermore, the nature of business is now changing from the traditional to online, so handling this switch properly can lead to tremendous growth.

New technology leads to digital transformation and a huge increase in online transactions, prompting the government to impose new laws and measures to monitor any fast-growing businesses.

Therefore, companies need to study and understand those laws and regulations and the related practices concerning e-commerce or the disclosure of personal data and others. Managing legal risk is vital to the success of business performance. Companies need to be more aware of legal non-compliance issues so that proper controls can be put into place to increase the standard of business compliance and to prevent internal fraud.

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.

Contributed by ORAWAN PHANITPOJJAMARN, an Associate Partner for Legal and Tax services at PwC Thailand

Source: http://www.nationmultimedia.com/detail/Economy/30356477