Dubai-based consultancy Virtuzone launched ‘TaxGPT’, what it claims is the world’s first artificial intelligence-powered corporate tax assistant, on Wednesday, May 24.
The tool is built on OpenAI’s GPT-4 and has been launched ahead of the June 1 deadline for the UAE’s new corporate tax rules.
TaxGPT pulls in information available from the UAE Ministry of Finance and the Federal Tax Authority to help businesses navigate the introduction of complex tax regulation.
Virtuzone claims this tool will evolve over time in response to ongoing tax rule changes.
Australian police face conflict of interest claims over PwC contract
The Australian Federal Police is investigating a former PwC Australia partner for his role in the tax leak scandal engulfing the firm, but the Senate has revealed that the police rely on the company for internal audits.
AFP Commissioner Reece Kershaw told the Senate yesterday, May 25, that the public can be confident that the nine contracts the police has with PwC Australia will not influence the investigation.
The Australian government directed all PwC employees involved in the tax leak scandal to step back from government work, the Australian Financial Review reported yesterday. PwC Australia has said it will comply with this advice.
The news comes after the matter was referred to the AFP on Wednesday, May 24.
Steven Kennedy, secretary to the Treasury, said in an official statement on Wednesday that former PwC Australia partner Peter-John Collins had “improperly used confidential Commonwealth information”.
However, the scandal has rocked an entire industry. The Financial Times reported that KPMG staff have been advised to “re-read the company’s code of conduct” by Alison Kitchen and Andrew Yates, the chair and CEO of KPMG Australia, in an email sent yesterday.
India introduces ‘angel tax’ breaks for some entities and countries
The Central Board of Direct Taxes in India notified investors on Wednesday, May 24, that certain entities and countries will no longer be subject to ‘angel tax’.
Angel tax is the tax paid by start-up companies on the issue of shares whose price is greater than the fair market value. It was introduced in 2012 under the Income Tax Act.
The CBDT notification said that the tax will not apply to government and government-related investors such as central banks, or entities that are owned 75% or more by governments.
Any entity residing in one of the 21 countries on the list will also be exempt. This includes Australia, Germany, Russia, Spain, the UK and the US.
However, the list excludes low-tax financial centres such as Mauritius, the Netherlands and Singapore.
The new tax break will make it easier for start-ups and newly listed companies to raise funds from the included markets.
Drax plans $4bn US biomass expansion for green tax credits
UK energy company Drax is set to spend $4 billion on two new biomass plants in the US to benefit from green tax credits, reported the Financial Times on Tuesday, May 23.
The Biden administration introduced tax credits for green energy investment as part of the Inflation Reduction Act (IRA), which was signed into US law in August 2022.
Drax CEO Will Gardiner described the tax credits as “icing on the cake” for the company.
“The tax credits we would have access to were already $40 per tonne before the IRA. Obviously, that’s improved, but it’s only one piece of the puzzle,” he added.
This could be the beginning of a US expansion for Drax with more plants to follow in years to come. Drax aims to become a world energy leader in “negative emissions” to boost its trade of carbon removal credits with other businesses.
IMF warns against tax cuts in UK forecast
The IMF published its growth forecast for the UK, giving the country a positive economic outlook on Tuesday, May 23, but the organisation warned the government not to cut taxes too soon.
Chancellor Jeremy Hunt welcomed the IMF forecast that the UK economy would not go into recession this year. However, the fund gave a subtle warning against making tax cuts too soon in its Article IV report.
The UK government should press ahead with plans to reduce government spending and keep taxation at current levels, according to the IMF.
British Prime Minister Rishi Sunak is facing growing dissatisfaction among Conservative members of Parliament, so an income tax cut would be a useful concession to his critics. He might want to announce tax cuts in the 2023 autumn budget ahead of next year’s general election.
IRS looks to step up TP enforcement, says official
The Internal Revenue Service is looking to increase its transfer pricing enforcement efforts, according to a senior agency official.
Jennifer Best, acting deputy commissioner of the large business division at the IRS, told Bloomberg on May 18 that the agency is exploring ways of improving data analytics and hiring new economists and tax law specialists as part of its focus on TP.
Best said that “transfer pricing fits squarely within the goals” of a call to step up tax enforcement, adding: “We hope to be doing more transfer pricing work going forward.”
She explained that the IRS is looking to do more audit work, “which involves a bilateral and multilateral approach to coordinate with subject matter experts and data scientists equipped with advanced analytical software”.
The IRS can do this thanks to the huge increase in funding from the Inflation Reduction Act, which has allocated $79.6 billion to the agency over the next 10 years.
Next week in ITR
ITR will continue to track developments in the tax leaks scandal engulfing PwC Australia, and closely watch shareholder demands for greater tax transparency.
We will also continue to publish stories on VAT matters and tax technology from the Indirect Tax Forum, which was held in Brussels this week.
Readers can expect these stories and plenty more next week. Don’t miss out on the key developments. Sign up for a free trial to ITR.
