We implement and enhance new strategies in the following seven domains: (1) M&A and other transactions; (2) human resources advisory; (3) operations (outsourcing and improving efficiency through AI and RPA); (4) integration with legal services; (5) indirect tax (consumption taxes, tariffs, etc.); (6) private tax(services for the high net worth individuals, etc.); and (7) the use of technology.
These strategies are closely linked to three challenges (themes) faced by clients in recent years.
First is the globalization of Japanese companies. As globalization gains further momentum and geopolitical uncertainty mounts, tax risks are emerging overseas. Furthermore, the strengthening of the international networks linking tax authorities has led to the creation of systems for tax authorities to exchange taxpayer information. How should we collect tax information to appropriately deal with tax risks in Japan and abroad, and how should we engage with the authorities to avoid reassessment risks and litigation risks faced as a result of tax inspections in each country? To deal with these taxation issues arising due to the movement ofpeople, goods and money, we need services that provide support for the establishment of appropriate tax risk management systems from a global perspective.
The next challenge to consider is that of transactions, as exemplified by M&A. Although Japanese companies have been intensifying their M&A activities overseas, in many cases they have failed to maximize the value of transactions after acquisition, or have neglected potential tax risks. Post Merger Integration (PMI) activities which serve to strengthen tax preparedness are becoming key to boosting the added value of a business. The scope of PMI includes not only corporate reorganizations, but also the management of transfer pricing risk, supply chain restructuring, human resource management and tax compliance.
The last challenge to emphasize lies in the use of technology to increase the efficiency of tax services and enable outsourcing. As AI, big data and other forms of digitalization see ever greater use throughout the world of business, the use of technologies such as RPA and AI for tax services will be essential. Furthermore, the
outsourcing of tax services is on the rise due to labor shortages and the need for cost reduction, making the use of technology an essential element in this respect as well.
Our tax professionals will continue to contribute to the development of the Japanese economy by providing new tax services, implementing and enhancing our abilities in respect to each of the seven strategies outlined above and focusing on the three challenges (themes) faced by our clients.