As the year comes to an end, we all tend to start doing some soul searching and both looking back at 2021 and see where the ups and downs where, whilst at the same time, looking forward to 2022 to try and assess what the next 12 months hold in store. Typically, this type of soul searching is done on a personal level, however it can be done with every aspect of our lives. In the last couple of years we have seen unprecedented changes when it comes to international taxation. Every year the number and impact of those changes seem to increase considerably, and keeping track of all that is going on, from a direct and indirect taxation level has become rather challenging. This is not to mention all the domestic changes which tax advisors need to also keep track of – the challenge is real! What should we expect during the next 12 months? Arguably, one of the greatest international agreements which was reached, from a tax perspective, during the last couple of years, was the Global Minimum Tax deal which was agreed during 2021. Whilst the impact of this agreement will be seen in 2023, as this is the year during which the legislation should come into force, 2022 will be an extremely important year to understand the details of this agreement. The main catalyst of this deal was definitely the US, with US Treasury Secretary Janet Yellen being the face of the deal and actively pushing with all 136 signatories to get this deal signed in a record time. They were indeed successful in getting the deal signed, the issue and the big question mark, is whether the Global Tax agreement will be agreed to in US Congress. If this will not be achieved, this will be a major blow for the Biden administration and could possibly jeopardise the entire global agreement. Apart from the US, there will be a number of other, politically-related, moves during 2022 which will set the scene for its implementation in 2023. As we have seen during the last ten to fifteen years, transparency will continue to be high on the agenda from an international tax perspective. From an EU perspective, following the introduction of the Directive on Administrative Cooperation (DAC 6), we will see the introduction of the new digital platform reporting rules (DAC 7) by the 31st December 2022. DAC 8, which will be applicable to Crypto Exchanges, is expected to come into force over the next 12 to 18 months. From a domestic perspective we will see less manoeuvring around with the corporate tax rates in view of the fact that the above-mentioned global minimum tax places most companies on a level playing field. We will see countries continue to look at ways to broaden the tax base and increase their tax revenues for various reasons looked to their long term economic policy. What is certain is that 2022 will prove to be a year full of changes from a direct, indirect, international and domestic tax persperice where the only constant is change. The writer is a co-founding partner of Seed, an international research driven advisory firm with offices in Europe and the Middle East. www.seedconsultancy.com | nicky@seedconsultancy.com
