Managing the risks, identifying the opportunities

In a period of fiscal consolidation, the priority for many countries is to ensure that all taxpayers pay their fair share of taxes. This is also the aim of the G20 / OECD BEPS (Base Erosion and Profit Shifting) initiative: to crack down on tax avoidance, harmful practices and aggressive tax planning. Moreover, the G20 also wants to build more resilient financial institutions, increase transparency and market integrity, and fill regulatory gaps.

In the area of exchange of information, the introduction of the Common Reporting Standard (CRS), which draws extensively on the intergovernmental approach to implementing FATCA (the Foreign Account Tax Compliance Act), is a huge challenge for all reporting financial institutions, i.e. banks, life-insurance companies, investment funds and investment vehicles. For banks that keep US securities in custody for their clients, compliance with the Qualified Intermediary (QI) agreement will certainly remain one of the biggest challenges because a senior manager will have to certify to the IRS that the bank is fully compliant.

For Alternative Anvestment Funds (AIFs), BEPS and unilateral measures taken by some countries might have an impact on treaty entitlement and might oblige a fund to adapt its structure. In this new tax environment, more and more, the goal will be to find a tax-neutral result. Tax optimisation will often only be possible when substance is in line with the activity. 

As for all other industries, Transfer Pricing (TP) is a key topic. Our TP specialists help you answer questions such as “How much equity should be allocated to a foreign branch?” or “When is an advisory fee paid by a Management Company to a related entity at arm’s length?”

Our Financial Services Tax expert team can help you tackle these challenges.

How BDO can help

Our dedicated Financial Services Tax team advise clients in all areas of financial services, including Private Equity, Asset Management, Leasing, Securitisation, Insurance and Reinsurance, and FinTech.    

Our services:

We work closely with our colleagues in our Financial Services Audit and Advisory teams. Our multi-disciplinary Financial Services team have a deep understanding of the sector and therefore understand the issues our clients face and have a complete commitment to delivering exceptional client service. We pride ourselves on the strong relationships we develop with our clients, characterised by effective communication, technical excellence and a tailored approach to each service we perform.

As part of the BDO Global Financial Services Industry Group, we have offices in all key global financial services markets. Our teams have strong relationships with our global offices, particularly those in London, New York, Zurich, Luxembourg, the Cayman Islands, Singapore and Hong Kong, to offer you an integrated approach internationally.