EMEA’s new challenges and opportunities
In Europe, as the United Kingdom leaves the EU, its Digital Services Tax (DST) comes into force, bringing with a new set of implications for both established digital firms, as well as multinationals looking to transition to a more digitised, consumer-facing business model. France, Italy, and the UK are among the European countries who have implemented a DST. While Switzerland, the Netherlands, and Ireland have expressed strong reservations, recommending a more global solution rather than a European solution to taxing digital activities.
Meanwhile, in the Middle East, the transfer pricing (TP) landscape is changing rapidly as countries across the region introduce TP regimes to meet the OECD’s BEPS standards. Tax directors told ITR that the cost of TP compliance has increased in the Gulf States, with countries introducing new TP regimes to meet the OECD’s BEPS standards. The introduction of VAT regimes in jurisdiction such as Oman, Bahrain, and Saudi Arabia also shows the need for strategic thinking about how to address a rapidly changing indirect-tax landscape.
Though the year ahead looks daunting for tax professionals and professional services firms in EMEA, the reality is that this is a time for individuals and firms to think strategically and to restructure and reorganise. Because regions across the Middle East, such as Oman the Gulf States, must now handle the introduction of VAT regimes, there is a great need for firms across the Middle East to find brilliant indirect tax talent from more advanced jurisdictions. Similarly, in Europe, firms will need to have the best tax expertise on hand as they confront issues surrounding DST and deal with the wider implications of Brexit.