Last year, the G7 published a high-level political agreement that proposed adapting the global tax system to the digital economy. The G7 adaptations would essentially be built on two pillars:
- Allocate taxable profits to the markets where customers are based
- Set a global minimum tax rate of 15%, higher in some jurisdictions
Given these changes, mid-market firms that are considering global markets might now be concerned about the new requirements. Global markets are an important factor, as Perkins said the International Business Report data across industries indicated that 57% of companies expect to grow the number of countries where they have customers, and 58% plan to increase the ratio of employees focused on international markets.
Digital tax changes could especially affect U.S. technology companies that are considering growth through international expansion or M&A.
The technology and telecommunications industry has led the way in helping companies across sectors respond to pandemic challenges.
To continue that leadership, companies must plan for new products and services, new domestic and international customers, and an engaged, diverse and inclusive workforce that balances remote and on-site work — all the while managing a panoply of risk factors.
With a focus on growth, a proactive approach and clear vision about the changes that need to be made, the finance function can help this industry lead the way.
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