5 tax questions when operating in the cloud

Ask your business-owning clients whether they cloud compute—it could have implications for their tax returns, says an EY report.

“When you operate in the cloud, you need to consider that all tax authorities expect that the underlying transactions be grounded and reported,” says Karen Atkinson, EY tax partner and Canadian technology leader. “Companies must conduct up-front and ongoing conversations to anticipate and manage policies from around the globe so that taxes are an enabler of the business strategy.”

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Mitigating potential unwanted tax implications from operating in the cloud begins by bringing together chief information officers, chief digital officers and even marketing and business development to integrate taxes into the business — not just on the IT infrastructure front.

Ask clients:

1. Where are your intermediaries and customers located?

2. Is your team aware of direct and indirect tax considerations?

3. Have you reviewed global contracts to manage local tax issues/expectations effectively?

4. Are you engaging with local tax authorities to gain guidance?

5. Are you in a position to reassess your tax position periodically?

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“Profit margins, partnership arrangements, compliance burdens and brand reputation are all at stake when companies fail to ask the right tax questions,” says Atkinson.

For more information, EY’s guide on more than 80 countries’ tax rules can be found here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.