May 4th, 2020 Insights, Covid-19

COVID-19 and Tax

Although governments around the world are doing what they can to support businesses during these difficult times, one key area of risk that has been highlighted is the tax residence of corporates. Where directors are no longer able to physically attend board meetings in the jurisdiction of residence, or key decision makers are incapacitated for prolonged periods of time, this may create a technical risk that entire corporate groups are considered to relocate for tax purposes. Depending on the jurisdictions involved this could have catastrophic tax consequences.

Several governments have offered helpful guidance in this regard, however, there is no clear indication as to how long this approach will last leaving businesses with a lack of clarity as to how to manage their tax affairs in the current climate. The tax insurance market has insured residency risks for many years and is well placed to provide businesses with financial certainty when it comes to their tax affairs.

You can find out more about Tax Liability Insurance by clicking here or if there are any other scenarios you may wish to discuss in confidence then please contact Dean Andrews on +44 (0)7876 815 643 or at dean.andrews@bmsgroup.com.