Site Loader
Steve Mendelsohn: Companies Seek BEPS Guidance; Concerned About Privacy, Compliance & Uncertainty


>>AT: I’m with Steve Mendelsohn, managing
director of Knowledge Solutions. Steve, it’s been an extremely busy couple of days, but
I guess – like it or not – BEPS has pretty much eclipsed everything else now, right?>>SM: I think BEPS has dominated the conversation
at the IFA Conference this year. It’s all anybody is really talking about, it’s on
everyone’s mind.>>AT: How do you think IFA feels about that?>>SM: I think IFA’s fine with it. I think
IFA feels this is a great forum to bring corporates, as well as advisers, as well as government
organizations together to have dialogue that everyone feels a need to have.>>AT: I guess that reflects the point that
it’s the issue most should be spending most time on now, right?>>SM: Absolutely. I think everyone has a
series of concerns about BEPS. One is what’s the impact it’s going to have on my company,
on our tax structure, on where we set up and how we set up. Two is what’s going to be
the compliance burden. How much work are we going to have to do in order to provide the
transparency that BEPS is demanding? And three is just the uncertainty. No one knows what’s
going to be the schedule of adoption of the BEPS’ recommendations country by country
by country. We’re only a few weeks away from the second round of recommendations being
released, and that will complete the groundwork for this.>>AT: You’ve obviously spoken to a number
of the corporates and the taxpayers here. How worried are they by this uncertainty?
What are you hearing from them?>>SM: I think the most immediate concern
I’m hearing is about the amount of work it is. I don’t think anyone is saying we
fear transparency, we fear having our governments understand what our structures are. You do
hear resistance about it, because it’s confidential information, more that a company has to reveal
about how many people they have doing what in each location. I think they feel it’s
an invasion of privacy and an invasion into the security of some of their intellectual
property.>>AT: Now, I know you overheard a conversation
in an elevator that sheds some light on this.>>SM: ::laughs:: I was in an elevator with
a tax direct from a major multination corporation.>>AT: You’re not going to tell us who it
is, are you?>>SM: Ah, it’s just a friend. We were talking
about BEPS. I said, “Well, there’s still a lot of work to be done.” He said, “Oh,
there will be a lot of work to be done for many years.” So, this is part of the continuum.>>AT: I spoke to Porus Kaka, who is IFA’s
President. In fact, you can find that interview on this platform as well. And I talked to
him about, I think he called it the taxpayers bill of rights, or taxpayers charter. Balancing
maybe the, some might say, “aggressive nature” of the OECD’s approach for the taxpayer.
What do you make of that?>>SM: Well, the OECD has gone into this for
the last two years in collaboration with the taxing law authorities. So they’ve gotten
the endorsement of the tax ministers of the OECD countries, of the G20 countries. So from
the government side, there is agreement, at least at the finance minister level. But the
voice that hasn’t been heard is the taxpayers’. It feels as if there’s a presumption that
the taxpayers are the villain in the play, and that’s not necessarily the case. So
if the rules are being changes, the taxpayers have to adjust to it. That’s fine, but it
shouldn’t be viewed that taxpayers have necessarily been abusing tax structure as
it is.>>AT: Just a final question. What are the
main things, Steve, do you think you’ll take from this? That you’ll take back to
the office and discuss with your colleagues?>>SM: The biggest impression that’s been
made on me here is the intensity of interest on this subject. The intensity of concern,
and the frustration with the uncertainty. We’re working on a product, our Global Currents
product, to track the evolution of the adoption of the BEPS recommendations. [There has been
a] great deal of interest in that, great deal of interest in just being better informed
so that taxpayers can navigate the shoals that they’re going to face here.>>AT: And we’ll know a lot more, of course,
come October. Come November, Pascal Saint-Amans from the OECD is coming to Reuters to do a
Newsmaker for us, so that will be good. Steve, thank you very much for talking with us.>>SM: Thank you, Axel.

Reynold King

Leave a Reply

Your email address will not be published. Required fields are marked *