KPMG Deck

1. ImprovingDomesticResourceMobilizationand
StemmingIllicitFinancialFlows
TaxJusticeforPromotingEqualityandSocial Justice:
Nairobi2019
Ataxadvisor’sperspective

2. 2
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Whatisjustice?
‘Justice … prompts us to give the
other what is ‘his’, what is due to him
by reason of his being or his acting’
(Caritas in veritate para 6)
“ “

3. 3
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Whatisduetotheotherasregardstax?
2 ‘Tax is the entrance fee we pay for a civilised society’
(Jane McCormick, Global Head of Tax, KPMG)
1 ‘Tax is theft’
3 ‘Tax is vital to fund the public services and infrastructure that are critical to
societies’ (B Team Responsible tax principles)

4. 4
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Whatdoesitmeantopaywhatisdue?
Tax as a legal and moral/ethical issue
03
‘Spirit of the law’
02
‘As long as it’s legal you can do it’
01

5. 5
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Businesschoice:Debtfinancing
Country A
Country B
Head office
Subsidiary
Tax is only one consideration in financing
No (limited)
tax
Dividends Interest payments on a loan
No deduction Deduction

6. 6
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Judgementrequired:Transferpricing
Country A Country B
Manufacturer Distributor
Internal sale Sale to
customers
Transfer pricing rules say sale must be for at least $80 Transfer pricing rules say purchase must be less than
$100
How to set the price between $80-$100?

7. 7
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Governmentincentivesandchangingnorms
Can/should the MNE still use Mauritius?
Developed
country
Mauritius
Developing
country
Parent
Finance company
Subsidiary
0% WHT
15% WHT

8. 8
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent
firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to
obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Howaretaxjudgements
made?
‘Tax is a business expense which needs to be managed,
like any other, and therefore businesses may legitimately
respond to tax incentives and statutory alternatives
offered by governments’ (BIAC Tax Principles)
‘We will not undertake transactions whose sole purpose is
to create a tax benefit which is in excess of a reasonable
interpretation of relevant tax rules’ (B Team)
‘Today it is clear that without gratuitousness, there can
be no justice in the first place.’ (Caritas in veritate, para
38)
1
2
3

9. 9
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Responsibletaxiseveryone’sbusiness
For more information see www.responsibletax.kpmg.com
Supra-
natural
bodies
Academics
Press
Public
Tax
authorities
Business
Policy
makers
Civil
society
Government

10. 10
Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
contactdetails
Christopher Morgan
Head of Global Tax Policy
T: +44 (0)20 7694 1714
E: christopher.morgan@kpmg.co.uk

11. Document Classification: KPMG Confidential
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with
KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other
member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International. | CREATE: CRT110730A
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