This week in tax: PwC announces strategic AI alliance to boost client service
The ‘big four’ accountancy firm partners with AI systems to augment a range of professional services, while Malaysia introduces a new capital gains tax
PwC’s global tax and legal services division has formed a strategic alliance with artificial intelligence platforms OpenAI and Harvey.
The partnership, announced on Tuesday, October 17, is aimed at training and deploying foundation models for tax, legal and human resources services.
In the announcement, PwC said the partnership is “set to kick off immediately”.
Specific tax, legal and HR/workforce AI models are expected to be rolled out “in the coming months”, according to PwC.
While the AI assistance is aimed at overhauling PwC’s internal processes, the added efficiency is intended to create a better service for clients.
PwC UK tax leader Laura Hinton said: “Our relationship with OpenAI and Harvey – as well as our other strategic relationships and capabilities – means we can develop the most sophisticated AI solutions for tax, legal and HR services.
“This way we can provide greater value and even deeper insights for our clients.”
The news comes several months after the global roll-out of Harvey to PwC’s tax, legal and people business, in March.
“Generative AI will be the biggest game-changer for advisory services for a generation. Our consistent investment in a variety of platforms puts us in a strong position to capitalise on the opportunity,” Hinton added.
Tax Sustainability Index launched to measure firms’ ESG credentials
International tax practice WTS Global and business advisory firm FTI Consulting have launched the ‘Tax Sustainability Index’, a benchmarking tool to track organisations’ ESG capabilities.
The creators claim that the TSi, announced on Friday, October 13, is the first ranking system of its kind in the tax market.
Firms will be able to position themselves against their peers, as well as trace their own performance over years to track their long-term ESG targets.
The index covers the following five areas: governance, tax risk and planning, international compliance, stakeholder engagement, and environmental.
Companies can participate in the TSi and receive a ‘results summary’ for free, while a ‘premium option’ including a full evaluation report by WTS Global specialists is also available.
Malaysia budget introduces 10% capital gains tax
Malaysia has established a new capital gains tax – a 10% levy to be imposed on the net gains from transferring shares in unlisted domestic companies.
The measure, which was announced as part of the country’s budget on Friday, October 13, is set to be effective from March 1 2024.
The CGT will have a few exemptions, namely for approved IPOs, internal restructurings and venture capital companies.
Malaysia will also introduce minimum tax legislation in 2025 for companies with a global income of at least €750 million ($789 million) per year, in line with the OECD’s pillar two project.
Adeline Wong, head of the tax, trade and wealth management practice of law firm Wong & Partners, member firm of Baker McKenzie in Malaysia, said the minimum tax legislation is “much welcomed”.
“This is in line with the timeline adopted by other neighbouring countries in the region,” she added.
Three countries added to EU non-cooperative tax jurisdiction list
The Council of the EU added Antigua and Barbuda, Belize and Seychelles to the EU list of non-cooperative jurisdictions for tax purposes on Tuesday, October 17.
The Council says the list, established in December 2017, includes countries that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on commitments to implement necessary reforms.
Three jurisdictions – British Virgin Islands, Costa Rica and Marshall Islands – were removed from the list, which now comprises 16 jurisdictions.
Necessary reforms should aim to comply with a set of “good governance criteria”, according to the Council.
This, the Council says, includes tax transparency, fair taxation and implementing international standards designed to prevent BEPS.
“The Council regrets that these jurisdictions are not yet cooperative on tax matters and invites them to improve their legal framework in order to resolve the identified issues,” it said.
Leo Berwick announces executive hires
M&A tax advisory firm Leo Berwick announced four senior hires on Wednesday, October 18.
Dorian Hunt, Joe Zenk, Steven Hurowitz, and John Troth have joined the firm. Hunt, Zenk and Troth are all based in the US, while Hurowitz will operate from Canada.
Hunt has taken up the role of partner and head of renewable energy, and Zenk is now the firm’s cost segregation leader.
Meanwhile, Hurowitz has become the firm’s Canadian M&A tax leader while Troth has assumed the position of M&A tax partner.
The hires are aimed at elevating the company’s infrastructure, renewables, and private equity service offerings for its global clients, according to the firm.
They will enhance the firm’s ability to “serve complex and dynamic markets”, Leo Berwick founder and managing partner Nick Kato said.
Next week in ITR
ITR will publish an exclusive interview with the tax leaders responsible for WTS Global’s TSi and hear more about the project’s lofty ambitions to accelerate the tax ESG agenda.
We'll also reveal what EY’s national tax department co-leader in the US has to say about BEPS.
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.