The annual World Tax directory, which has been running since 1994, is a key resource in assisting tax professionals locate specialist advice. Each edition rates the tax expertise offered in more than 50 jurisdictions globally, giving tax executives the most comprehensive information about the market for tax advice.
This year, our researchers spoke to tax advisory firms and multinational companies around the globe to get the most up-to-date information to aid us in the ranking process, as well as informing their writing about each country we cover.
A key theme throughout the guide is the OECD's base erosion and profit shifting (BEPS) initiative, the effect of which is now being keenly felt in many jurisdictions. For companies in many jurisdictions, 2017 is the first year for which country-by-country reports will have to be produced. This is creating a large amount of compliance work for advisory firms as companies aim to be ready in time.
Additional transparency initiatives, such as the common reporting standard (CRS), have made more compliance work for businesses and firms, too.
In indirect tax, BEPS Action 1 has inspired more and more countries to adopt indirect tax systems based on the destination principle. This change has hit four continents so far and will only continue to gather pace. It requires businesses selling online to gather more data about their customers to prove which country they are based in to ensure the appropriate level of VAT/GST is collected and delivered to the appropriate tax authority.
In addition, Australia has confirmed that it will remove its low-value goods exemption for indirect tax, creating more compliance work for companies selling such goods. Other countries, as well as the EU, will surely follow suit in the next few years.
Tax disputes will also increase as a result of BEPS as tax authorities and companies adjust to the changes it has heralded, particularly in the area of transfer pricing. Transactions, in particular, will come under greater levels of scrutiny than ever before, making watertight tax advice for transactional work ever-more important for companies.
In this year's guide, we have added extra rankings tables detailing firms' prowess in indirect tax, transactional tax and tax disputes. These tables have been rolled out to Latin American jurisdictions this year, and if they are a success we hope to cover more jurisdictions in the future.
These rankings, split into tier 1 and tier 2, are a great way to recognise the stellar work of smaller local firms and boutique firms that offer quality advice in certain areas but may struggle to break into the top tiers of the main World Tax rankings.
World Tax is unique among directories as it classifies professional services, law firms and other tax advice providers together, rather than looking at them separately, because they undoubtedly compete for work.
The fact that this competition exists is also evident in the regular moves that practitioners make between law firms and other providers. It is common for advisers to spend different periods at law firms and Big 4 firms during their careers.
World Tax's website this year contains full details of the rankings, tax rates and tax authorities in all of the jurisdictions listed within this guide. You can visit it at www.itrworldtax.com, whenever you find yourself without your copy of World Tax 2018. This year's rankings are expected to be uploaded by mid-October.
TP Week, International Tax Review's online-only sister publication about transfer pricing, publishes its own directory about advisers, lawyers and providers in that market. Please refer to it at www.worldtransferpricing.com if you are looking for more depth in this area.
Research for next year's World Tax and World Transfer Pricing directories will open in April. If you would like to participate, contact Joe Stanley-Smith at joseph.stanley-smith@euromoneyplc.com.
