Through Resilience to Recovery in Asia Pacific WTS Global at a glance Founded in 2003 by WTS Germany Locally rooted – Globally connected: Present in more than 100 countries with more than 3,500 tax professionals Tax-focused: Coverage of the entire range of tax advisory services Independent & free of conflict: No audit Quality assurance: Stringent quality reviews Diverse customer base: From multinationals to private clients Central management & coordination: Centrally managed global tax practice About WTS Global With representation in over 100 countries, WTS Global has already grown to a leadership position as a global tax practice offering the full range of tax services and aspires to become the preeminent non-audit tax practice world- wide. WTS Global deliberately refrains from conducting annual audits in order to avoid any conflicts of interest and to be the long- term trusted advisor for its international clients. Clients of WTS Global include multinational companies, international mid-size companies as well as private clients and family offices. The member firms of WTS Global are carefully selected through stringent quality reviews. They are strong local players in their home market who are united by the ambition of building a truly global practice that develops the tax leaders of the future and anticipates the new digital tax world. WTS Global effectively combines senior tax expertise from different cultures and backgrounds and offers world-class skills in advisory, in-house, regulatory and digital, coupled with the ability to think like experienced business people in a constantly changing world. For more information please visit:https://wts.com/global wts.com 2 Through Resilience to Recovery in Asia Pacific Our key differentiators WTS Global is a leading global tax practice. Tax-focussed e G v i l t o a b v a l o n n I F t ree of conflic Full scope of tax services globally Global services Additional cross-cutting services → International Corporate Tax → Financial Services → Mergers & Acquisitions → Real Estate → Transfer Pricing & Valuation Services → Tax Technology → Indirect Tax- Private Clients & Family Office Services → Global Mobility → Tax Controversy → Customs Through Resilience to Recovery in Asia Pacific 3 Through resilience to recovery Tax executives lead the way to resilience and recovery. Since the publication of our first WTS Global in Asia Pacific → Tax policies have become a focal point in every brochure in 2019, the sense of continued business government’s pandemic response mechanism to help optimism has been replaced by economic disruption and spur economic confidence and support groups most devastation brought about by the COVID-19 pandemic. affected by the volatile business climate. On the other Now, more than a year into the pandemic that crippled the hand, businesses need to brace for aggressive tax world, the extent of the impact reverberates across sectors policies and implementation that would be put in place and industries in the Asia Pacific region. As governments by tax authorities at a later stage. contend with deficits and slowdowns, businesses, → The OECD BEPS2.0 final report will be one of the most meanwhile, are exposed to risks arising from disrupted widely anticipated developments for international tax supply chains, evolving tax policies and fiscal stimulus and transfer pricing practitioners globally. Regardless of measures. the details of the report, all multinational enterprises will need to reassess global tax strategies and The World Bank’s latest report states that, amongst Asian structures. economies, only China and Vietnam are poised for growth → Free trade agreements such as the Regional in 2021. As sustainable recovery for most Asian economies Comprehensive Economic Partnership Agreement remains elusive, key developments in the region and (RCEP) provide possibilities for cross-border businesses globally are considered at play in helping shape how soon to implement tax and duty-savings strategies in their economies and businesses can fully bounce back: supply chains. → With the adoption of digital taxes by a growing number of Asia Pacific jurisdictions, concerns abound including double taxation issues arising from unilateral tax measures. → US President Joe Biden’s tax and trade policies such as the country’s potential return to the Trans-Pacific Partnership would be favourable to export-oriented Asian economies. → The Biden administration’s trade policies vis-à-vis China will also determine whether there will be a reprieve to trade tensions or whether companies will need to continue to walk the tight rope of complying with two increasingly extra-territorial and potentially conflicting set of trade rules. → The effectiveness of vaccines will also determine how quickly the global economy is able to recover to pre- COVID levels or whether businesses will need to deal with a new norm of permanent impediments to global trade and commerce. 4 Through Resilience to Recovery in Asia Pacific Businesses with significant Asian footprints need long- term and conflict-free tax advisors who can work with their tax executives to develop resilient and agile We can help you lead the responses to the volatile regulatory landscape. We, at WTS transformation in a complex Global in Asia Pacific, can help international businesses tax world thrive and recover through sustainable tax strategies and compliance. We draw our strength and expertise from our → How should CFOs and CEOs align their business highly collaborative Asian network of tax experts with strategies to manage the impact of global trade presence in 14 jurisdictions across the region, enabling us tensions and new trade agreements on supply to assemble a team for all areas of tax including: chains and profit margins? → What steps do CEOs need to take to help → Global value chains risk-proof their businesses in line with BEPS 2.0 → Transfer pricing developments and unilateral action maintained → International and regional tax planning by tax authorities globally? → International tax and permanent establishments → What is the best approach to deal with → Mergers & acquisitions aggressive income assessments? → Regional tax controversies → What other changes are coming as governments seek to fund their enormous COVID-19 support → Dispute resolution via competent authority processes programmes? – APA & MAP → Digital taxation → Financial services → Private equity Asia Pacific focus areas → Indirect tax → Global value chains → International trade → Digital taxation → Private clients → Tax controversy → Tax technology → Mergers & acquisitions → International tax and permanent We have the expertise and experience to provide global establishments businesses with insights and advice to navigate an increasingly complex and changing tax and trade landscape in the region. We hope businesses will find our second Asia Pacific brochure useful as they plot their way through resilience to recovery. Eugene Lim Asia Pacific Chief Operating Officer, WTS Global Through Resilience to Recovery in Asia Pacific 5 Priority topics for Asia Pacific Tax Leaders Global value chains In recent years, global value chains (GVCs) have been activities. In addition to the growing trade tensions growing in terms of length and complexity. By organising between the US and China, further disruptions in GVCs complex networks of factories and logistics providers, were also triggered by unforeseen events such as the businesses have been able to minimise costs while recent Myanmar coup and the US-imposed sanctions on maximising efficiency. However, this operating model Myanmar. exposes businesses to increased risks in terms of disruptions to their GVCs. These events have revealed the drawbacks of long- distance and complex GVCs. As such, we expect multinational corporations to begin rethinking and The advent of the COVID-19 pandemic has reassessing their strategies in order to ensure the “ revealed the fragility of existing global value resiliency of their GVCs. Doing so would be essential to chains… Business leaders are rethinking ensuring competitiveness in the market. We expect to see long-distance, complex and overly- businesses begin to employ strategies such as the shortening of GVCs, and the automation of production concentrated GVCs. activities. These strategies will allow for companies to mitigate the risk of disruption to their GVCs, which have been proven to be costly. The advent of the COVID-19 pandemic has revealed the BEPS 2.0 and unilateral measures maintained by various fragility of existing GVCs. Since the early days of the tax authorities as well as the proliferation of free trade pandemic, many economies have entered into either full agreements will also figure prominent in business and tax or partial lockdown. Consequently, manufacturing and strategies of multinational enterprises as they seek to international transport activities were disrupted, forcing achieve the optimal balance between optimisation, businesses to either relocate or reshore their production resilience and sustainability in their GVCs. 6 Through Resilience to Recovery in Asia Pacific Transfer pricing International tax and permanent With the advent of the G20 OECD Inclusive framework – establishments Pillars 1 and 2 (“BEPS 2.0”), transfer pricing is playing a The Covid-19 pandemic has caused massive disruption to more pivotal role than ever before as taxpayers and tax cross-border activities and project timelines, and has administrators deal with the new proposals to reallocate resulted in