The key tax issues
In essence cloud brings with it:
- Significant tax issues for both providers and users of cloud, which are multiplied when the transactions are cross-border.
- An uncertainty around the tax implications of cloud. Often, the tax impact is not fully considered at the time that the transition to a new cloud delivery model is being planned and executed. Tax can influence the long term outcomes of planned new cloud projects, and should be included in any business case.
- Additional scrutiny from Tax authorities who are becoming increasingly aware of the tax implications of the switch from traditional IT service provision and the potential for tax leakage.
It is becoming increasingly important that companies do not undertake cloud activities in isolation but weigh up any business opportunities with the potential tax implications.
KPMG support materials
- Video – Mike Camburn (Indirect Tax Partner in the UK) and Deborah Green (Transfer Pricing Partner in the UK) provide a high level overview on the impact cloud services could have on your business
- Tax in the Cloud briefing paper (PDF 485 KB) – Our Global Cloud Tax team give a detailed technical overview of the direct and indirect tax issues, challenges and opportunities arising out of cloud service arrangements. The section below provides a snapshot of the types of questions we raise through this briefing and how to tackle it from a tax angle.