What will be the most hotly debated international tax advisory topics in 2021?
Although it is difficult to make predictions on such complex subjects, observers have identified a number of open issues in 2020: the taxation of the digital economy, intra-group transactions, compliance with international regulations. Some analysts also mention the issue of transfer pricing and the rules known as DAC6, the compulsory automatic exchange of information on cross-border mechanisms.
With regard to international tax advisory issues in 2021, macroeconomic conditions and the consequences of the Covid 19 pandemic remain crucial. De Martini & Associati’s analyses note, among the main trends to be observed
- corporate reorganisation processes,
- management of foreign subsidiaries,
- tax compliance, also in relation to government measures on Covid 19.
International tax advice 2021: the scenario
The year 2020 has seen a significant increase in some phenomena that were already active in previous years, but to a lesser extent.
The growth of tax issues on the digital economy is linked to the development of e-commerce: in Italy it had already been present for some time but it was the lockdown that gave it further acceleration (for example in the Food and Consumer Goods sectors).
The second phenomenon linked to the pandemic is the development of smartworking: after the first regulatory facilitations, we need to understand how the Italian scenario will be shaped in the long term.
The large number of governmental measures in the course of the emergency and the difference between national and international tax regulations are another variable under the lens of legal, tax and international tax consultants.
Corporate management, tax compliance and Italian legislation
Multinationals with an office in Italy are very attentive to the evolution of national legislation on tax issues. While professionals are mainly interested in the novelties of the Ristori decrees, large companies are looking at the rules on the freeze on redundancies and the redundancy fund, but not only.
The management of corporate reorganisation processes was already a complex issue before Covid19.
The pandemic has changed the face of many market segments: in some sectors the crisis will lead to downsizing processes, but there are also areas in which growing demand will lead to expansionary processes.
For international tax advisors, an important objective in 2021 will be to update company plans for mergers, incorporations or transfers of business units under Italian law, taking into account the recently introduced concessions for combinations.
Tax advice for foreign companies with an office in Italy
Will Covid19 make tax compliance more difficult? Will international companies face new problems in 2021?
The answer is no, provided they have introduced a clear management methodology from the outset. Nor should travel difficulties due to anti-counterfeiting measures be a cause for concern, as many document transmissions are now possible remotely, thanks to secure online platforms.
As for international tax advisory issues in 2021, the complexity of Italian and international taxation is solvable, but it is important to closely follow legislative updates and to rely on competent advisors.
