The G8 started a process of radical change to the international tax system.
Responding to Public concern regarding the tax planning activities of some high profile companies, the international tax system is undergoing a significant programme of change that intends to address the issues of:
- The digital economy
- Updating the permanent establishment rules
- Modernising tax treaties to curb aggressive tax planning
- Hybrid instruments
- Exchange of information
- Economic substance V legal constructs
- Intellectual property rights
This is all likely to have a major effect on employment taxation. There has been considerable focus on the status of companies in different jurisdictions and the activities of their employees in determining a fairer apportionment of profits internationally. There is therefore likely to be more focus on:
- the numbers of employees
- their seniority
- their cost structure
- Any mismatch between employment and corporation tax treatment.
Share schemes and awards are an increasing proportion of employees’ remuneration and therefore the tax treatment is likely to come under greater scrutiny as will the question of where the costs are charged.
The course will also look at the new diverted profits tax, which is being introduced from 1 April 2015 and what effect it may have in terms of remuneration structure. It will also look at how employee costs could be used either to assert that a diversion of profits has occurred or to defend the company’s current stance.