10 Dec Head of Tax considerations in light of COVID-19
An interview with Jeroen Jager, Group Tax Director Royal Boskalis Westminster NV
Over the course of May & June, Sal Partners is sharing the views of several influential figures from across the Dutch market. In our latest “Insights” publication, Jeroen Jager, Group Tax Director Royal Boskalis Westminster NV has shared his thoughts on the impact of the current pandemic, including areas for consideration to ensure the function is best prepared for what lies ahead.
Q. What is your view on the related COVID-19 measures announced by the Dutch government?
In my view the Dutch tax related COVID-19 measures are adequate and were published in a timely manner. Understandably, the main objective is to support the small and medium sized companies and self-employed entrepreneurs. However, many Dutch based multinationals may also be heavily impacted and may need support.
Q. How do you balance risk whilst taking advantage of current opportunities and how has this changed as a result of the pandemic?
In general, I believe you should always make a balanced decision, the current situation has not changed this. In my view, during and after the current crisis, there will be more risks and less opportunities. Avoiding or reducing double taxation has replaced seeking tax planning opportunities.
Q. At times of such “crisis” cash is king, how is the tax function supporting this?
As part of the broader Finance department, the tax function is expected to contribute its share. This is the case now more than ever. We continuously monitor our group’s tax payable and tax receivable positions to ensure we have the most optimal cash tax position. This is not limited to corporate income taxes but also indirect taxes.
Q. Is there a moral obligation to look critically at measures – such as COVID-19 extension of payments – should the company utilise these even if not intended?
Most measures are generic by nature and some companies may need more support than others. It may also depend on the specific situation, the market conditions, etc. Every company will take this into consideration before taking a decision to apply for relief.
Q. How has the current pandemic impacted existing transfer pricing policies and what affect will this have on your documentation process?
I haven’t seen much impact thus far. However, my expectation is that there will be even more pressure than in the past on having adequate documentation given the fact that tax revenues globally are likely to go down as a result of the crisis. Local governments will be aggressively scrutinizing intra-group transactions. I anticipate an increase in audits over the coming 12 months, something we as a function must be prepared for.
Q. How is the group ensuring a strong compliance and administration focus during such times?
With modern communication and emerging technologies we can manage our processes as if there were no crisis. Given the current climate, there is an increased emphasis on active/formal communication, however this has always been vital to ensure tax remains connected with the business.
Our team spirit is very strong and we have built up strong relations with the business, which helps us continue with our daily work. In addition, the positive, healthy relationship we have with the Dutch tax authorities, and the information and support we receive from our external tax consultants is of real benefit.
Our main goal is to ensure that we can continue to support our business activities in the best possible way.
It feels that we are in the eye of the fiscal storm. We will need to be prepared for every scenario, given it is impossible to predict what the global impact of this crisis will be on the tax community. Local legislative changes due to protectionism and an even greater focus on transfer pricing will most likely arise. We should be able to explain our tax position in a simple, transparent way and we will need to document/explain our position well. But even then, I expect the risk of double taxation will increase.