Change seems to be the only constant in the tax world. Between new laws, increased regulatory requirements, and evolving best practices, corporate tax executives always need to be aware of the latest trends. There are numerous tax issues that tax professionals should keep an eye in the near future. Here are five that could have the biggest impact in 2014:
1) Compliance with the FATCA
The Foreign Account Tax Compliance Act was passed in 2010 as a way to bring U.S. owners of foreign financial accounts into compliance with U.S. tax code. Implementation and enforcement of the law has evolved in the years since the law’s passage, but the IRS did issue final regulations in January 2013. That means that companies with foreign accounts are expected to file returns in compliance with the law in 2014… but don’t close that Swiss bank account yet.
2) Tax implications of cloud computing
More and more businesses are moving operations onto the cloud. However, most tax laws predate cloud technology. That means it’s safe to assume there will be a new wave of laws and regulations that address how cloud computing and operations should be taxed. It’s important for financial and tax executives to be involved early in any cloud computing discussions.
3) New Repair Regulations
In September 2013, the IRS issued its final regulations on how repairs required to maintain, acquire, or dispose of property should be treated for tax purposes. The regulations are extremely complex and affect any business that owns tangible property, which is nearly ever business that exists. The regulations are in effect for 2014, so tax professionals should review them early to decide how best to handle needed repairs and maintenance.
4) The Marketplace Fairness Act
The Marketplace Fairness Act would allow states to collect sales tax from remote retail businesses that have no physical presence in a specific state. The bill was passed by the Senate in 2013 and is now in the Judiciary Committee. If it’s passed in 2014, it will have far-reaching implications for all retail businesses who operate online. Surprisingly, Amazon is fine with this.
5) Transfer pricing
As countries look for new revenue sources, many are reexamining their transfer pricing rules. Both Australia and Brazil introduced new transfer pricing rules in 2013. It’s wouldn’t be surprising to see more countries follow suit in 2014. Tax executives in multinational companies should keep an eye on transfer pricing rules this year as changes could have a substantive impact on operations and profits.
A handful of other issues are also worthy of attention, including implementation of the Affordable Care Act, enhanced IRS scrutiny of corporate tax returns, and increased state focus on unclaimed property. Tax planning is an ever-changing task. However, keeping focus on these issues should help a company stay one step ahead of the changing landscape.