Your IT professionals have likely considered cloud services for your organization, but it’s up to finance to make sure they understand how moving things like supply chain management to the Cloud will impact tax liability.
The uber-finance pros at KPMG have considered the problem and their white paper on the topic is a good place to start your investigation of the subject.
The bottom line: The tax cops are becoming keenly aware of the tax leakage that’s happening around Cloud services. Determining which state or country a transaction is taking place in can shift tax revenues that are critical to government in these days of global economic distress.
The Cloud is a new frontier for most tax authorities, so taxpayers will need to get out ahead of the situation by getting a clear picture of how transactions are made and how income is generated when the physical servers that execute the deal are in a different geographical location.
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