If you have STBV data, this is why you should use it
09 June 2017
Do you know where your people are, and what they’re doing while they’re there? You may not; according to our recent Managing Mobility survey, some organisations struggle to get a handle on how many of their people are working internationally at any one time.
The reasons to track the movement and activities of short-term business visitors (STBVs) are increasingly compelling. The Organisation for Economic Co-operation and Development’s base erosion and profit shifting (BEPS) project has lowered the threshold for permanent establishment, making STBVs relevant in tax considerations. And there are growing immigration concerns as the borders and visa requirements in some countries tighten.
The good news is that technology has moved on to such an extent that it’s easier than ever to track the movement, and even the actions, of your STBVs. In fact, you probably already have access to the data you need. The bad news is that authorities also know that you probably have access to the data you need – which makes it far more likely that they will ask you for it.
Digitalisation and analytics are making this issue much more visible and transparent to tax authorities around the world. And they’re paying close attention to STBVs; HMRC, for example, centralised its STBV team last year. Authorities in many jurisdictions are carrying out more audits of STBVs; at a recent Business Traveller event we held in London, we heard that around 25% of large employers have received a PE challenge in the past year.
We’re moving to the point where the authorities not only can ask for STBV data, but will expect it as a matter of course. The wording of the OECD Model Tax Convention suggests that it isn’t onerous to ask companies to collect this data – when you add to that the fact that more and more companies are routinely reporting their STBV information internally, that’s creating some momentum.
In other words, if you have STBVs data, use it. This will be the key differentiator to allow your business to remain competitive and minimise future risks.