Cloud computing is the most popular technology that is making an impact on all technology companies to reduce information technology (IT) and infrastructure costs.

1. Considering Business in the Cloud? Know the Existing Tax Challenges
Cloud computing is the most popular technology that is making an impact on all technology
companies to reduce information technology (IT) and infrastructure costs. There are many unaware
of the other impacts of this trend, and an important oversight is the global tax position of the
company. With companies continuing to expand their cloud footprints globally, it is best to be aware
of the latest tax challenges and know more about how the tax laws that can affect their decisions
about cloud computing.
In today’s business environment, there are a few areas of tax ambiguity. That is the (i) assessment
of global withholding taxes on cross-border payments, (ii) creation of taxable nexus in one
jurisdiction when conducting business via the cloud from another jurisdiction, and (iii) the broad area
of indirect taxation. When these areas are not tackled, there can be tremendous tax liabilities that
can hinder the overall profitability of cloud computing arrangements. And while taxes are usually
applicable regardless of whether a company is profitable, there is a compelling need to focus on
global tax planning as it is fueled by the lack of tax clarity in regions that are very active in cloud
computing.
Know more about tax planning in the cloud
Even as the public and private cloud services are expected to generate a significant part of
worldwide IT spending, it must also be noted that there may be grants available for expansion in
certain jurisdictions. With this trend catching on, one of the greatest challenges is that cloud
computing taxation issues are increasing faster than the global taxing jurisdictions can respond with
guidance. To effectively deal with the basic tax issues, it is necessary for a company to address
fundamental issues like how it conducts business with its customers or vendors, etc.
Although cloud computing is often borderless, the tax regulations and tax compliance requirements
are not. A small variance can lead to complex and significant tax issues that can affect a large
number of end-user companies. It is also important to note that the management of user companies
to understand that cloud users has the ultimate compliance responsibility. It is necessary for end

2. users to determine how to capitalize on the benefits of cloud computing, while adhering to
compliance requirements.
Keeping abreast with the tax law changes and compliance is important. Keep in mind your particular
circumstances, tax planning and goals before making large financial decisions and take the help of a
reputed tax expert to get assistance in foreign exchange account, OVDPS etc.
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