Strategy & International Tax Planning

EG: As a Chartered Global Tax Advisor, what prevailing headwinds do you see impacting in the global economy? 

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Knut Olsen: There is no doubt, the global tax climate will change and it will change for the worse. Multinational corporations will be exposed for higher tax risk and scrutiny, with more frequent tax inspections, tougher tax authorities and more time consuming and costly disputes and litigation. Unfortunately, not every corporation is prepared for these uncertainties and risks.

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EG: What typical challenges are presented with transparency in tax planning? 
 

KO: Global tax planning will always be a red flag for the tax authorities. Transparency is a necessity in order to combat tax evasion, but transparency on tax planning might trigger unnecessary suspiciousness at the tax authority and tax inspections.
 

EG: How may larger organisations benefit from your thorough knowledge of the tax appeal process? 

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KO: Dr. K. Olsen Global Tax has a unique global tax experience, not many tax advisors have such qualifications as 12 years tax education inclusive a PhD and two master degrees in international taxation as well as four years education as a tax inspector, specialising in tax audit techniques. Further, Dr. Olsen has 38 years’ experience as a Chartered Global Tax Advisor, Head of Global Tax, Adjunct Tax Professor, Tax Inspector, and lecturer at the Tax Inspector School. He also has a background as a lawyer, an economist and accountant and he has a good understanding of international business. 

EG: Tell us about some of the opportunities and pitfalls associated with Transfer Pricing?  

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KO: Transfer Pricing (TP) might be used as an excellent tool for tax planning – but only if it is fulfilled correctly and within the law. On the other hand, Transfer Pricing is probably the highest risk of any kind for all multinational corporations for several reasons. Firstly, multinational corporations have TP risks in every operating country, perhaps more than 100 countries. For example, if a corporation uses the wrong price on goods or services, it is likely that it is wrong in every country. Secondly, the corporations have historic risks in all operating countries as the tax authorities might have made adjustments ten years backwards. Thirdly, there is a risk of penalties in all operating countries and the penalty might be more than 100 %. Fourth, there is definitely a risk of double taxation in more than one country. Fifth, there is always a risk that the tax inspectors are not qualified, lack experience or have preconceived opinions which is wrong. Sixth, there is a high risk that it might be time consuming and there may be costly disputes with tax authorities followed by litigation. Seventh, the wrong decisions, thorough inspections might trigger time consuming disputes and litigation which may significantly affect the corporations’ financial situation.   
 

EG: How can you help institutional clients with ISO certification?  

KO: Significant elements of ISO are to identify, analyse and mitigate risks, establish satisfactory documentation, fulfil continuous improvement and evidence for all stakeholders like the tax authority that you have done your homework. Dr. Olsen’s opinion is that you might get the tax authorities off your back far sooner with an ISO certification on TP.   

EG: What impact do you think that the introduction of trade tariffs will have on global tax revenues and fiscal policies in the next five years?    

KO: The tax and complexity will without a doubt increase.  

EG: How has your PhD in International Taxation equipped you to succeed at the forefront of international tax planning? 

KO: Achieving a doctorate in international taxation gives you a thorough and in deep understanding of the subject.

EG: What future implications do you see for corporations with the increasing digitisation of taxation?  

KO: One implication will be the question of where the corporation operates their business and where they have a permanent establishment.   EG