This is the first in a series of three articles from Grant Thornton on the tax issues and tax opportunities associated with the digital economy, internet of things, and data analytics
The digital revolution affects nearly every aspect of our lives. It impacts the way the world does business, both today and in the future, and poses a number of challenges for decision makers. This article explains how digital is impacting the economy, its effect on the business enterprise, and, how your tax strategy needs to align to your digital strategy to avoid double taxation. In addition it outlines what action is required to minimize tax risk and maximize tax opportunities in the digital economy.
The Work Ahead: The Second Half of the Chessboard: Media & Entertainment Is N...Cognizant
Although the M&E industry was among the first to digitize its products and services, it can’t stop there. Our study reveals they need to extend digital innovations from the front office into the middle and back office in order to ensure relevance far into the future.
SMACology i.e. SMAC Technology is the new buzzword reforming the IT industries as well as the skills of technical aspirants. Learn how.
PDF courtesy: KPMG
Forrester: CPG Consumer Engagement in a Digital Worldaccenture
This document summarizes a study conducted by Forrester Consulting on digital transformation opportunities in the consumer packaged goods (CPG) industry. The study found:
1) CPG marketing leaders anticipate significant investment in digital capabilities to target global consumer segments, increase consumer lifetime value, and accelerate new product introductions.
2) Leaders expect sales through their own digital channels and e-retailers to grow substantially over the next 5 years, outpacing traditional retail channels.
3) However, leaders also perceive barriers to digital transformation from local cultural attitudes, privacy regulations, and logistical challenges to direct-to-consumer commerce.
The document discusses IT investments and priorities for consumer goods companies. It finds that while IT spending as a percentage of revenue and operating expenses is down slightly, companies are focusing investments more on growing sales. Top investment areas for sales/marketing include consumer mobile apps, digital marketing analytics, and social media platforms. For supply chains, top investment areas are demand management, supply chain analytics, and visibility. The document advocates balancing investments that improve short-term sales with those preparing for emerging digital priorities and new business models using technologies like the Internet of Things.
While digital transformation is often focused on enhancing customer interactions, the document finds that the greatest impact may come from cost savings and operational changes beyond customer interfaces. An analysis of multiple industries found that the average potential bottom-line impact from cost reductions through digital transformation is 36% over five years, compared to an average of 20% from increased digital sales. To fully capture potential value, companies need to take a holistic view and apply digital tools across their entire business model and value chain, not just in customer-facing areas.
Potential link between digital adoption and business growthBodhtree
The adoption of digital technologies has transformed businesses globally, allowing companies to streamline operations and engage customers through mobile technologies. As digital transformation continues, businesses must embrace revolutionary changes, not just evolutionary, in order to survive. Companies have taken different paths to digital maturity, such as Nike developing capabilities in silos first before linking them, while Asian Paints created unified vision and governance. Industries like travel and music felt digital disruption earliest while others like financial services transformed through e-commerce and now innovate with mobility and analytics. Analytics adoption also varies, from basic use of transaction data to predictive sales, with challenges of skills and culture change required to build capabilities. Executives recognize the need to invest in digital platforms to build long
Apps for the Connected World: Supercharge Customer Data with Code HalosCognizant
By making meaning from the data that swirls around every digital interaction, companies can gain unprecedented insight into what customer and prospects want and value, essentially what makes them "tick."
The Work Ahead: The Second Half of the Chessboard: Media & Entertainment Is N...Cognizant
Although the M&E industry was among the first to digitize its products and services, it can’t stop there. Our study reveals they need to extend digital innovations from the front office into the middle and back office in order to ensure relevance far into the future.
SMACology i.e. SMAC Technology is the new buzzword reforming the IT industries as well as the skills of technical aspirants. Learn how.
PDF courtesy: KPMG
Forrester: CPG Consumer Engagement in a Digital Worldaccenture
This document summarizes a study conducted by Forrester Consulting on digital transformation opportunities in the consumer packaged goods (CPG) industry. The study found:
1) CPG marketing leaders anticipate significant investment in digital capabilities to target global consumer segments, increase consumer lifetime value, and accelerate new product introductions.
2) Leaders expect sales through their own digital channels and e-retailers to grow substantially over the next 5 years, outpacing traditional retail channels.
3) However, leaders also perceive barriers to digital transformation from local cultural attitudes, privacy regulations, and logistical challenges to direct-to-consumer commerce.
The document discusses IT investments and priorities for consumer goods companies. It finds that while IT spending as a percentage of revenue and operating expenses is down slightly, companies are focusing investments more on growing sales. Top investment areas for sales/marketing include consumer mobile apps, digital marketing analytics, and social media platforms. For supply chains, top investment areas are demand management, supply chain analytics, and visibility. The document advocates balancing investments that improve short-term sales with those preparing for emerging digital priorities and new business models using technologies like the Internet of Things.
While digital transformation is often focused on enhancing customer interactions, the document finds that the greatest impact may come from cost savings and operational changes beyond customer interfaces. An analysis of multiple industries found that the average potential bottom-line impact from cost reductions through digital transformation is 36% over five years, compared to an average of 20% from increased digital sales. To fully capture potential value, companies need to take a holistic view and apply digital tools across their entire business model and value chain, not just in customer-facing areas.
Potential link between digital adoption and business growthBodhtree
The adoption of digital technologies has transformed businesses globally, allowing companies to streamline operations and engage customers through mobile technologies. As digital transformation continues, businesses must embrace revolutionary changes, not just evolutionary, in order to survive. Companies have taken different paths to digital maturity, such as Nike developing capabilities in silos first before linking them, while Asian Paints created unified vision and governance. Industries like travel and music felt digital disruption earliest while others like financial services transformed through e-commerce and now innovate with mobility and analytics. Analytics adoption also varies, from basic use of transaction data to predictive sales, with challenges of skills and culture change required to build capabilities. Executives recognize the need to invest in digital platforms to build long
Apps for the Connected World: Supercharge Customer Data with Code HalosCognizant
By making meaning from the data that swirls around every digital interaction, companies can gain unprecedented insight into what customer and prospects want and value, essentially what makes them "tick."
This document summarizes the key findings of a digital audit of 400 small and medium enterprises (SMEs) in the Greater Birmingham region conducted in January 2015. It finds that while most SMEs recognize the importance of digital technology for business growth, too few are fully taking advantage of it. Specifically, it reports that 57% of businesses do not fully understand the benefits of digital technologies, and 61% do not think there is sufficient training and support available. The audit also identifies lack of digital skills and unreliable or unaffordable connectivity as major barriers preventing SMEs from further adoption of digital. It concludes that investment in digital skills development, improved connectivity, and easier access to business support should be priorities to help SME
Driving growth in Indian manufacturing industry Sumit Roy
Indian manufacturing is just perfectly poised to Unlocking the transformation value with technology .While businesses understand that in order to build an organisation that is agile and suited to withstand current market and economic volatilities, there are several things to be considered before taking a digital leap. More than just a strategy for any individual technology trend or for combining more than one of them, companies need a systematic approach to adopt technologies in a holistic fashion. The industry trends and challenges primarily drive the appropriate selection of technology solutions, which need to be fine-tuned to a company’s needs based on its scale, capabilities and its specific issues. This joint CII-PwC report takes a closer look at two industries in particular, manufacturing and infrastructure, and tries to decode the prevalent challenges in these two sectors, the kind of initiatives being taken to drive growth and development, and how IT adoption is playing an important role to overcome these challenges
Digital Monitoring & Reporting
Monitoring conversation, opinion, issue and campaign on Digital Channel.
Providing the Report and simple analysis for the evaluation and planning.
Getting the insight from audience
Digital Maintenance &
Engagement
Develop & Managing the campaign on digital Channel.
Building the awareness and engagement with the target audience.
Supporting the brand for 360 brands campaign
A Transformation Roadmap for Media and Entertainment RevitalizationCognizant
By following a five-step plan, media and entertainment companies can optimize human resources, standardize key business processes and revamp aging IT infrastructure to ensure viability over the long term.
Rail Revenue World Congress brings together experts implementing the most innovative projects, new revenue strategies and business plans that are helping to grow revenue and increase customer engagement.
No matter where your interest lies, we have content, networking and new partners for you to meet.
By bringing four events together under one roof, you get to choose the sessions most relevant for you to help your business grow revenues and implement new technologies and strategies to bring real innovation to your organisation.
Disney - making magic through digital innovationRick Bouter
Disney is leveraging digital technology and data analytics to transform the customer experience across its businesses. It has invested over $1 billion in its MyMagic+ initiative, which uses magic bands and a mobile app to provide a seamless, personalized experience for visitors to its theme parks. Disney also uses analytics to improve operational efficiency and forecasting, and has an organizational focus on digital with leadership from top tech executives and ongoing investment in emerging technologies through partnerships and research.
In our latest white paper, our expert authors share insights on why an integrated, real-time approach is key to business planning in the digital age. This special report is the great work of our supply chain experts, who are leading some of our firm’s most innovative thinking and solutions with top global clients.
Learn About:
The evolution of planning capabilities in the enterprise
Why an integrated business planning (IBP) framework should include end-to-end business processes across the organization
A view into the different maturity levels an organization can achieve and strategies for developing a digital-driven IBP framework
How companies can get started and accelerate their journey to advanced business planning
In our latest piece, we share unique perspectives on how artificial intelligence is amplifying human potential and reshaping business. This article explore 3 fundamental questions:
How will AI shift the expectations of my customers?
How will AI transform the way my competitors run their businesses?
How should my company respond to AI?
Ctrl-alt-del: Rebooting the Business Model for the Digital AgeCapgemini
Our research with the MIT Sloan Management Review reveals that only 16% of organizations are leveraging digital technologies to develop new business models. Most organizations follow traditional approaches to innovation that focus on new products and services, rather than on business models. However, research suggests that the returns from traditional approaches have been diminishing with time. As Serguei Netessine, Professor at INSEAD Singapore says, “Pharmaceutical companies spend as much as 30% of their revenues on R&D, trying to develop new products or technologies. But the return from this enormous expenditure has been very elusive and it is a common problem across industries.” Business model reinvention can be as good a route as technology, product or service innovations. This research highlight five different approaches that organizations can adopt to reinvent their business model with digital technologies.
Internet of Things: From Strategy to Action: Driving IoT to Industrial ScaleCognizant
This document discusses scaling Internet of Things (IoT) solutions from pilots to an industrial scale. It argues that full IoT value is not realized by connecting just a few devices, but rather by focusing on how these technologies can impact business strategies. To scale IoT solutions, organizations must address challenges like large numbers of devices, high volumes of data, security, and partner capabilities. Successful scaling requires understanding the business problem, how IoT amplifies value across a product's lifecycle, considering the physical environment, and realizing that an integrated approach from many partners is needed. The goal is for IoT systems to interact and become embedded in physical workplaces to drive business transformation.
The results of our latest study on ‘Smart data transformation,’ carried out with Fraunhofer FIT, are here. In this special research report, we wanted to understand the business benefits, challenges and success factors around this topic, as well as identify key needs to facilitate the effective implementation of smart data transformation.
1. How the digital economy relates to the digital business models?
2. What are digital business platforms and how they impact digital transformation?
3. Can Generation C transform your business?
Industry 4.0 is the name of the next industrial revolution which is fueled by the advancement of digital technologies. It
is dramatically changing how companies engage in business activities. As a result, the disruptive nature of Industry 4.0
demands a reassessment of the requirements for IT. On the one hand, there is the possibility that the responsibilities of Chief Information Officers (CIOs) could be taken over by other executives such as the Chief Digital Officer (CDO) or the Chief Technology Officer (CTO). On the other hand, this
recent development creates entirely new perspectives for positioning themselves and their IT departments
within the business.
The impact of digital technologies is reaching a magnitude at which IT is considered a substantial
business driver, potentially placing CIOs in the driver’s seat.
In Q4 2015, the digital media sector in New York saw strong investment activity. The largest financing was Jet.com raising $500 million in a Series B round. Overall, e-commerce and digital content saw the most financing activity. There were also three M&A exits, with the largest being Perion Network acquiring Undertone Networks for $180 million. The document provides details on these and other notable financings and M&A transactions in the New York digital media space during Q4 2015.
Ericka pionin digital transformation – definedEricka Pionin
Digital Transformation – Defined
To be successful, companies must focus on customer experience and to remain sustainable, they must invest in digital technology.
The document discusses the opportunity for Italian insurers in digital insurance. It estimates that €30-€36 billion in annual insurance premiums are influenced by customers researching online. This represents a significant untapped opportunity for insurers. The use of digital channels is growing, with 50-55% of customers wanting both digital and relationship channels. Younger customers especially prefer digital. Insurers need to ensure they meet customers online in order to capture this business.
Three Engagement Models for Embracing Digital in Life SciencesCognizant
The document discusses three models for how life sciences organizations can structure their business, IT, and external partners to drive digital innovation:
1. IT-centric model: IT defines digital strategy and drives innovation, collaborating with business and partners.
2. Business-centric model: Business defines digital strategy and owns innovation, partnering with IT and external providers.
3. New entity model: A separate digital entity is created to define strategy, identify initiatives, and manage delivery, working with business and IT.
The document analyzes the pros and cons of each model and provides criteria for organizations to evaluate which model may be best suited to their needs and capabilities.
In today’s business environment, digital transformation has turned into a necessity to cope with persistent business needs of customer acquisition and brand building. However, the prospect of revamping is an opportunity offered by Digitalization and successfully transformed businesses can become industry leaders to dominate the market.
Also, companies should know that disruption is at the core of such a change and the only way to succeed is to create and follow a comprehensive plan. Moreover, the disruptive technologies can be adopted smartly to propel strategic growth.
As the future is all about innovative technologies such as Augmented Reality, IoT, Virtual Reality, etc., digitalization would eventually become the way of life, and the firms that can keep abreast with the digital macrocosm have better chance to succeed.
Digital technologies are reshaping businesses and how consumers interact with them. IT leaders must help their organizations adapt to these changes by embracing digital platforms and taking an ecosystem approach. This involves thinking about transforming products, processes and business models with digital, and aligning business and technology strategies. Adopting platform-based IT using integrated cloud stacks can provide the agility, scalability and innovation that digital businesses require.
The smac-code-embracing-new-technologies-for-future-business (1)Sumit Roy
Social mobile Analytics and Cloud: How SMAC model is changing and disrupting business across industry. SMAC is not only changing the way markets function , but it also is a pointer that technology today is the biggest tool for innovation,however this is a double edged sword as SMAC is a great enabler. Small companies and the giants both have a level playing field
This document summarizes the key findings of a digital audit of 400 small and medium enterprises (SMEs) in the Greater Birmingham region conducted in January 2015. It finds that while most SMEs recognize the importance of digital technology for business growth, too few are fully taking advantage of it. Specifically, it reports that 57% of businesses do not fully understand the benefits of digital technologies, and 61% do not think there is sufficient training and support available. The audit also identifies lack of digital skills and unreliable or unaffordable connectivity as major barriers preventing SMEs from further adoption of digital. It concludes that investment in digital skills development, improved connectivity, and easier access to business support should be priorities to help SME
Driving growth in Indian manufacturing industry Sumit Roy
Indian manufacturing is just perfectly poised to Unlocking the transformation value with technology .While businesses understand that in order to build an organisation that is agile and suited to withstand current market and economic volatilities, there are several things to be considered before taking a digital leap. More than just a strategy for any individual technology trend or for combining more than one of them, companies need a systematic approach to adopt technologies in a holistic fashion. The industry trends and challenges primarily drive the appropriate selection of technology solutions, which need to be fine-tuned to a company’s needs based on its scale, capabilities and its specific issues. This joint CII-PwC report takes a closer look at two industries in particular, manufacturing and infrastructure, and tries to decode the prevalent challenges in these two sectors, the kind of initiatives being taken to drive growth and development, and how IT adoption is playing an important role to overcome these challenges
Digital Monitoring & Reporting
Monitoring conversation, opinion, issue and campaign on Digital Channel.
Providing the Report and simple analysis for the evaluation and planning.
Getting the insight from audience
Digital Maintenance &
Engagement
Develop & Managing the campaign on digital Channel.
Building the awareness and engagement with the target audience.
Supporting the brand for 360 brands campaign
A Transformation Roadmap for Media and Entertainment RevitalizationCognizant
By following a five-step plan, media and entertainment companies can optimize human resources, standardize key business processes and revamp aging IT infrastructure to ensure viability over the long term.
Rail Revenue World Congress brings together experts implementing the most innovative projects, new revenue strategies and business plans that are helping to grow revenue and increase customer engagement.
No matter where your interest lies, we have content, networking and new partners for you to meet.
By bringing four events together under one roof, you get to choose the sessions most relevant for you to help your business grow revenues and implement new technologies and strategies to bring real innovation to your organisation.
Disney - making magic through digital innovationRick Bouter
Disney is leveraging digital technology and data analytics to transform the customer experience across its businesses. It has invested over $1 billion in its MyMagic+ initiative, which uses magic bands and a mobile app to provide a seamless, personalized experience for visitors to its theme parks. Disney also uses analytics to improve operational efficiency and forecasting, and has an organizational focus on digital with leadership from top tech executives and ongoing investment in emerging technologies through partnerships and research.
In our latest white paper, our expert authors share insights on why an integrated, real-time approach is key to business planning in the digital age. This special report is the great work of our supply chain experts, who are leading some of our firm’s most innovative thinking and solutions with top global clients.
Learn About:
The evolution of planning capabilities in the enterprise
Why an integrated business planning (IBP) framework should include end-to-end business processes across the organization
A view into the different maturity levels an organization can achieve and strategies for developing a digital-driven IBP framework
How companies can get started and accelerate their journey to advanced business planning
In our latest piece, we share unique perspectives on how artificial intelligence is amplifying human potential and reshaping business. This article explore 3 fundamental questions:
How will AI shift the expectations of my customers?
How will AI transform the way my competitors run their businesses?
How should my company respond to AI?
Ctrl-alt-del: Rebooting the Business Model for the Digital AgeCapgemini
Our research with the MIT Sloan Management Review reveals that only 16% of organizations are leveraging digital technologies to develop new business models. Most organizations follow traditional approaches to innovation that focus on new products and services, rather than on business models. However, research suggests that the returns from traditional approaches have been diminishing with time. As Serguei Netessine, Professor at INSEAD Singapore says, “Pharmaceutical companies spend as much as 30% of their revenues on R&D, trying to develop new products or technologies. But the return from this enormous expenditure has been very elusive and it is a common problem across industries.” Business model reinvention can be as good a route as technology, product or service innovations. This research highlight five different approaches that organizations can adopt to reinvent their business model with digital technologies.
Internet of Things: From Strategy to Action: Driving IoT to Industrial ScaleCognizant
This document discusses scaling Internet of Things (IoT) solutions from pilots to an industrial scale. It argues that full IoT value is not realized by connecting just a few devices, but rather by focusing on how these technologies can impact business strategies. To scale IoT solutions, organizations must address challenges like large numbers of devices, high volumes of data, security, and partner capabilities. Successful scaling requires understanding the business problem, how IoT amplifies value across a product's lifecycle, considering the physical environment, and realizing that an integrated approach from many partners is needed. The goal is for IoT systems to interact and become embedded in physical workplaces to drive business transformation.
The results of our latest study on ‘Smart data transformation,’ carried out with Fraunhofer FIT, are here. In this special research report, we wanted to understand the business benefits, challenges and success factors around this topic, as well as identify key needs to facilitate the effective implementation of smart data transformation.
1. How the digital economy relates to the digital business models?
2. What are digital business platforms and how they impact digital transformation?
3. Can Generation C transform your business?
Industry 4.0 is the name of the next industrial revolution which is fueled by the advancement of digital technologies. It
is dramatically changing how companies engage in business activities. As a result, the disruptive nature of Industry 4.0
demands a reassessment of the requirements for IT. On the one hand, there is the possibility that the responsibilities of Chief Information Officers (CIOs) could be taken over by other executives such as the Chief Digital Officer (CDO) or the Chief Technology Officer (CTO). On the other hand, this
recent development creates entirely new perspectives for positioning themselves and their IT departments
within the business.
The impact of digital technologies is reaching a magnitude at which IT is considered a substantial
business driver, potentially placing CIOs in the driver’s seat.
In Q4 2015, the digital media sector in New York saw strong investment activity. The largest financing was Jet.com raising $500 million in a Series B round. Overall, e-commerce and digital content saw the most financing activity. There were also three M&A exits, with the largest being Perion Network acquiring Undertone Networks for $180 million. The document provides details on these and other notable financings and M&A transactions in the New York digital media space during Q4 2015.
Ericka pionin digital transformation – definedEricka Pionin
Digital Transformation – Defined
To be successful, companies must focus on customer experience and to remain sustainable, they must invest in digital technology.
The document discusses the opportunity for Italian insurers in digital insurance. It estimates that €30-€36 billion in annual insurance premiums are influenced by customers researching online. This represents a significant untapped opportunity for insurers. The use of digital channels is growing, with 50-55% of customers wanting both digital and relationship channels. Younger customers especially prefer digital. Insurers need to ensure they meet customers online in order to capture this business.
Three Engagement Models for Embracing Digital in Life SciencesCognizant
The document discusses three models for how life sciences organizations can structure their business, IT, and external partners to drive digital innovation:
1. IT-centric model: IT defines digital strategy and drives innovation, collaborating with business and partners.
2. Business-centric model: Business defines digital strategy and owns innovation, partnering with IT and external providers.
3. New entity model: A separate digital entity is created to define strategy, identify initiatives, and manage delivery, working with business and IT.
The document analyzes the pros and cons of each model and provides criteria for organizations to evaluate which model may be best suited to their needs and capabilities.
In today’s business environment, digital transformation has turned into a necessity to cope with persistent business needs of customer acquisition and brand building. However, the prospect of revamping is an opportunity offered by Digitalization and successfully transformed businesses can become industry leaders to dominate the market.
Also, companies should know that disruption is at the core of such a change and the only way to succeed is to create and follow a comprehensive plan. Moreover, the disruptive technologies can be adopted smartly to propel strategic growth.
As the future is all about innovative technologies such as Augmented Reality, IoT, Virtual Reality, etc., digitalization would eventually become the way of life, and the firms that can keep abreast with the digital macrocosm have better chance to succeed.
Digital technologies are reshaping businesses and how consumers interact with them. IT leaders must help their organizations adapt to these changes by embracing digital platforms and taking an ecosystem approach. This involves thinking about transforming products, processes and business models with digital, and aligning business and technology strategies. Adopting platform-based IT using integrated cloud stacks can provide the agility, scalability and innovation that digital businesses require.
The smac-code-embracing-new-technologies-for-future-business (1)Sumit Roy
Social mobile Analytics and Cloud: How SMAC model is changing and disrupting business across industry. SMAC is not only changing the way markets function , but it also is a pointer that technology today is the biggest tool for innovation,however this is a double edged sword as SMAC is a great enabler. Small companies and the giants both have a level playing field
Digital Expertise Breakfasts
The document provides information about a breakfast event on digital transformation hosted by Digital Works Consulting. It includes an agenda that discusses trends in digital technology, how digital transformation can benefit businesses, an overview of transformation approaches, and how to successfully implement transformation. Examples of Digital Works Consulting clients who benefited from their expertise in digital strategy, product development, and project management are also provided.
The document discusses the Accenture Technology Vision for 2015. It notes that businesses are now operating in a "digital business era" and a "We Economy" where companies can connect and collaborate at a global scale through digital technologies and ecosystems. Pioneering companies are making "big bets" by creating digital platforms and ecosystems that connect their business with customers, partners, devices and new markets. This allows them to tackle large opportunities and shape entire industries and experiences in new ways. The document examines examples like Home Depot, Philips, and Fiat creating digital ecosystems in areas like connected homes, healthcare, and automobiles.
Future readiness through business transformation_Information Week_12 Mar...Deepak Khosla
Business transformation is becoming a proactive approach for best performing companies to envision and create the future of their industry. Drivers of transformation include changes to business models, improvement programs, and corporate transactions. Transformation requires synergy between technology, processes, and developing new skills in people. Done right, transformation can dramatically improve performance through increased market share, reduced costs, and greater customer satisfaction. Emerging technologies like big data, the internet of things, and cloud computing are enabling companies to transform through insights, connectivity, and flexibility. These technologies present opportunities to boost profits through new business models and intelligence gained.
To survive and thrive in the age of the customer,
businesses must become digital. While many
firms believe they have a digital strategy, few
are thinking about truly digitizing their business
strategy. Yet the pioneers of the digital revolution,
be they B2B or B2C firms, are driving increased
revenues through a superior digital customer
experience and are increasing efficiency and agility
through digital operational excellence. This report
outlines the driving forces behind digital business.
This is an update of a previously published report;
Forrester reviews and updates it periodically for
continued relevance and accuracy. We revised
this edition to factor in new ideas and data.
Leaders spend billions on digital transformation. How to keep up?N-iX
- Many companies will die in the next 10 years if they don't undergo digital transformation to adapt to new technologies. Only 16% of companies see themselves as digital natives currently.
- To succeed with digital transformation, companies need to develop a clear digital strategy, form strategic partnerships with digitally advanced vendors, and exploit open source solutions. They must eventually shift to a digital culture where digital is the core of their business.
- Case studies of Telefonica and Lebara show how they developed digital strategies, partnered with key solution providers, used open source components, and are shifting to digital-first mindsets. This approach helped boost their operations and customer experiences.
The document discusses how businesses need to move beyond viewing online channels primarily as a way to reduce costs and instead focus on improving relationships with consumers at scale. As technologies like mobile, social media, and analytics have increased the amount of digital interactions and data available about consumers, companies now have opportunities to better customize experiences, learn more about individual consumers, and engage in two-way interactions rather than one-way broadcasts. However, most companies still treat consumers as transactions rather than relationships. To be successful, businesses will need to adopt strategies that manage relationships with consumers at scale through a unified, cross-channel approach.
The digital cpg value opportunity: seen but unrealizedFoodInnovation
- Conventional wisdom suggests CPG is slow growth, but disruptors have grown rapidly by adopting new business models and engaging consumers directly through technology. Traditional leaders have been left behind.
- For CPG incumbents to recapture growth, they must create hyper-responsive engagement with consumers, develop hybrid traditional/new business models, and adopt a modern intelligent enterprise for agility.
- Disruptive business models are changing the landscape as the lines between makers, sellers, and consumers blur. CPG incumbents are lagging disruptors in digital performance across planning, production, sales, and management.
This document provides a process and checklist for developing an effective digital strategy. It outlines common barriers to digital strategy such as alignment, skills, silos, metrics, resources, culture and regulations. The process involves identifying a catalyst, building leadership support and a team, conducting research, co-creating a strategy, synthesizing it, gaining alignment, and implementing the strategy. Following this process can help brands adapt to digital disruptions and remain relevant.
89% of consumers switch to a competitor after a poor CX Abhishek Sood
89% of consumers switch to a competitor following a poor customer experience, according to an Oracle study. But how can you use digital technology to improve your customers' experience?
Uncover how several prominent businesses embraced digital technologies to retain customers and increase profits. For example, Domino's Pizza had a 23% growth in profit after it allowed customers to track their deliveries online.
Discover the 4 factors that can make a digital transformation project profitable and worthwhile.
ClickZ has launched an innovative new series of buyers guides, created with the aim of cutting through the complexity of the technology landscape to help our community of readers make better decisions about vendors. The first of this series is dedicated to bid management platforms, which help brands maximize the returns on their PPC, social media, and display advertising budgets.
The role of a bid management platform has changed significantly over the past decade, in line with the increased sophistication of the digital media industry. With over $90 billion spent on paid search in 2017, these software packages play a vital role in deriving maximum value from a brand’s digital media budget.
The core component of the ClickZ bid management vendor guide is our customer survey, which received over 1,600 responses.
Understanding Digital Transformation and Its Importance in Today’s Business L...Anil
As of my last knowledge update in January 2022, I don't have specific information about "Techwave" or the latest developments in the business landscape post that date. However, I can provide a general understanding of digital transformation and its importance in today's business environment.
The Financial Times, in partnership with HP, recently held an event in Milan to discuss new CIO strategies for the digital age. Topics discussed included customer engagement, consistent delivery of service across all channels, strategies for driving innovation and supporting business growth, and security concerns in an era of BYOD and cloud services.
This white paper highlight key discussion points from the event.
1) Digital assistants like Alexa and Siri will become the new gatekeepers between brands and consumers as they control the information consumers receive.
2) For marketers, success will depend on learning how to market not just to consumers but to the machines to ensure brands are relevant and delivered in responses.
3) Only the most hyper-relevant brands that truly understand individual consumer needs and behaviors will be able to ensure their brand is the one the digital assistant selects and delivers to the consumer.
Digitization affects almost everything in today's organizations, which makes capturing its benefits uniquely complex. However
1. Getting the engine in place to digitize at scale is uniquely complex as digital touches so many parts of an organization requiring unprecedented coordination of
People,
Processes, and
Technologies.
2. A strategy to increase revenue which generates the most value requires
A clear vision and plan for how to capture that value, and
Technologies and tools to digitize interactions with customers.
New capabilities and teams to manage and coordinate the delivery of those journeys across the organization.
3. With the average corporate life span falling for more than half a century(Standard & Poor’s data show it was 61 years in 1958, 25 years in 1980, and just 18 years in 2011) digitization is placing unprecedented pressure on organizations to evolve. That means digitally driven business model is crucial to survival.
The document discusses what constitutes the digital economy and how businesses can transform digitally to succeed within it. Key points include:
- The digital economy requires organizations to undergo digital transformation and examine how to leverage technology for new products/services, processes, audiences, and competition.
- Successful digital companies focus internally on building business platforms enabled by technology that allow them to innovate and execute efficiently across departments.
- Three factors driving digital transformation are rapid technology innovation, competitive pressure from digital disruptors with new business models, and demanding millennial consumers who expect mobile-first experiences.
- To become digital leaders, companies must break down silos between functions like marketing and IT and have both work collaboratively from
Similar to The Digital Economy: How to develop effective tax planning for your digital strategy (20)
Bahrain: Phased roll out of VAT in BahrainAlex Baulf
The National Bureau of Taxation, operating under the Ministry of Finance, conducted their first VAT briefing session on 3rd December 2018 which was attended by several accounting firms. MOF presented the way forward on VAT implementation and addressed several concerns raised during the meeting. In light of this discussion, Grant Thornton Bahrain's VAT team has set out the key takeaways in the attached Alert.
UK: VAT alert - Government publicises VAT changes if there is “no-deal” on B...Alex Baulf
Not that it is expecting a ‘no-deal’ scenario – the UK Government has specifically emphasised that it fully expects the opposite - but, just in case, it has announced a number of measures relating to UK VAT should agreement between the EU and the UK not materialise.
The Government considers that it is progressing well in its negotiations with the EU on the terms of Britain’s exit. However, rightly, it recognises that it is always possible that agreement will not be reached. As a consequence, it has made announcements in relation to VAT in the event of a so-called Brexit ‘no-deal’.
UK businesses – especially those that trade with businesses in other Member States of the EU have had concerns on a number of fronts, not least how the UK VAT system will work after Brexit and what changes will be needed in relation to import and export procedures.
The announcements made by the Government should help businesses to prepare for a ‘no-deal’ Brexit with a little more certainty. In line with the Government, businesses should not assume that an agreement will be reached. Businesses should be prepared for a ‘no-deal’ scenario even though that may not come to fruition.
The Court of Appeal upheld previous rulings that an employment agency, Adecco, was liable to pay VAT on the full value of supplies of temporary staffing services to clients, not just administrative fees. Adecco argued it only exerted limited control over temporary workers and was not their employer, but the Court found the contractual arrangements and services provided to clients were effectively the same regardless of worker classification. This clarifies that employment agencies must pay VAT on total fees charged for staffing services unless workers contract directly with clients. The decision impacts how agencies structure operations and could increase costs passed to clients.
The First Tier Tribunal (FTT) has released its decision in the case of The Rank Group plc (Rank). Rank operated 3 types of automated gambling machine: Fixed Odds Betting Terminals (FOBT), section 16/21 and section 31/34 machines. The issue for the FTT to consider was whether the machines were ‘similar’. If so, treating them differently for VAT purposes would offend the principle of neutrality. The CJEU had previously held that the machines in question fell within the same category (broadly referred to as slot machines). However, it was for the UK court to decide whether the machines in question were ‘similar’. If so, treating the income from such machines differently for VAT purposes would be considered to offend the principle of fiscal neutrality. The FTT determined that the correct test was to examine the betting experience from the perspective of the user. Would the user’s needs be equally met whichever machine was selected? In examining the evidence, the FTT concluded that the user experience was substantially similar and that users would select machines for a variety of reasons, often playing machines interchangeably. On the basis that such factors as machine location, atmosphere, opening hours and availability were specifically stated by the CJEU to be disregarded in this context, the FTT concluded that the machines were similar. Accordingly, the principle of fiscal neutrality was offended. Rank’s appeal allowed.
The Court of Appeal has issued a unanimous judgment in the appeal by Zipvit Ltd (Zipvit) against the judgment of the Upper Tribunal. Zipvit, like many other businesses, contracted with Royal Mail to supply delivery services. At the relevant time, these services were treated by Royal Mail, Zipvit and HMRC as being exempt from VAT under the UK’s implementation of the ‘postal services’ exemption.
However, following the Court of Justice judgment in the ‘TNT’ case in 2009 (which ruled that VAT exemption only applied to universal postal services), it became clear to all parties (including HMRC) that the mailmedia service provided by Royal Mail should have been liable to VAT at the standard rate.
On that basis, Zipvit submitted a claim for a refund of the input VAT purportedly included in the price it had paid to Royal Mail. HMRC rejected that claim and Zipvit appealed to the First-tier Tax Tribunal (FTT). The FTT dismissed the appeal as did the Upper Tribunal.
Now, the Court of Appeal has dismissed Zipvit’s appeal. The judgment issued on 30 June 2018 dismisses the appeal on the basis that Zipvit had no valid VAT invoice to support its claim. A fact regarded as a fatal flaw.
This case - a referral to the Court of Justice by the French court - delivers the judgment of the European Court with regard to the recovery of input VAT on expenditure incurred by Marle Participations SARL (‘Marle’). The company sought to recover input VAT on expenditure incurred on expenses relating to a corporate restructure. The tax authorities denied input VAT recovery on the grounds that the expenditure related to activities that were capital in nature and so fell outside the scope of VAT (thereby precluding VAT recovery). Marle argued that the letting of property by the holding company to a subsidiary amounted to ‘involvement in the management’ of the subsidiary. This involvement constituted an ‘economic activity’ so enabling VAT to be recovered on the restructuring costs.
The Court has ruled that the letting of property to its subsidiary amounted to ‘involvement in the management’ of that subsidiary. As such it constituted an ‘economic activity’ carrying the right, in principle, to input VAT recovery. Such input VAT recovery was to be regarded as general expenditure of Marle (and therefore subject to the normal rules governing VAT recovery). Providing the letting services were supplied by Marle on a continuing basis, for consideration, the services were taxable and Marl could demonstrate a direct link between those services to its subsidiary and the consideration it received, input VAT could be deducted in full.
International Indirect Tax - Global VAT/GST update (June 2018)Alex Baulf
High level slides from Grant Thornton's VAT Club seminar in London held in June 2018.
Topics covered include:
ECJ decision - C-580/16 Hans Bühler - Triangulation
Netherlands - VAT rate change
Russia - VAT rate change
Bahamas - VAT rate change
Angola - New VAT system
Liberia - New VAT system
Costa Rica - New VAT system
Costa Rica - e-invoicing requirements
Hungary - Electronic Invoicing
Italy - Mandatory e-invoicing
Australia - GST on hotel accommodation
Poland - VAT split payments
Spain - First penalties in relation to SII
Greece - SAF-T & E-Invoicing?
Argentina - VAT on digital services
Columbia VAT on digital services
Canada - Quebec: New QST obligations for non-resident suppliers of digital services
USA: Wayfair – the Decision
India - “Happy Birthday GST" - what's next
New Zealand - Low value consignment relief
Malaysia - GST to 0% and transition to SST
United Arab Emirates - Exchange Rates for VAT purposes
Kuwait - VAT postponed until 2021?
GCC - Bahrain, Oman, Qatar VAT implementation latest
The Spanish tax authorities have begun imposing penalties for non-compliance with Immediate Supply of Information (ISI) VAT reporting requirements, now that the legal framework for penalties is in place. Approximately 1,300 companies, or 2% of those required to comply, have not yet implemented ISI. Penalties include fines of 1% of annual turnover for complete non-compliance, 0.5% of invoices for late reporting, and €150 per unreported transaction. Authorities will also fine inaccurate, omitted, or false reporting by 1% of the erroneous amounts, with a minimum of €150 and maximum of €6,000.
On May 3, 2018, Georgia Governor Nathan Deal signed H.B. 61 enacting significant changes to sales and use tax laws, including imposing a bright-line nexus rule on certain sellers of tangible personal property. Effective January 1, 2019, any seller that conducts 200 or more separate retail sales of tangible personal property for Georgia delivery or obtains more than $250,000 in gross revenue from such sales is considered a dealer that must either register to collect and remit sales tax or notify customers of use tax obligations and report to the state that such requirements have been fulfilled.
U.S. Supreme Court Holds Hearing in South Dakota v. WayfairAlex Baulf
1. The US Supreme Court heard oral arguments in South Dakota v. Wayfair, a case that could overturn the physical presence standard for sales tax nexus established in Quill v. North Dakota.
2. Several Justices appeared open to eliminating the physical presence rule, while others emphasized upholding precedent or suggested having Congress address the issue.
3. The hearing reflected deep divisions and uncertainty among the Justices, with the outcome difficult to predict. The Court's decision later this year may not provide a clear consensus.
The document summarizes new rules and guidance issued in China related to taxation. It discusses a circular that defers withholding tax on dividends paid to foreign investors if they are reinvested in China. It also summarizes new enterprise income tax return forms issued by the State Administration of Taxation and guidance clarifying value-added tax issues arising from VAT reforms. Finally, it discusses a public notice that provides further clarification on determining "beneficial ownership" in tax treaties.
International Indirect Tax - Global VAT/GST update (March 2018)Alex Baulf
These are the slides from the International Indirect Tax - Global VAT/GST update presented at Grant Thornton's VAT Club held in London on 9th March 2018.
The topics discussed include:
EU
• Bulgarian Presidency
• VAT Action Plan – proposal for a Definitive VAT System based on destination principle
• Customs: Binding Valuation Information (BVI)
• Considerations for using TP for Customs value
• Hungary: Electronic Invoicing
• Spain: SII 1.1 new version
• Italy: Simplifications to “Communications of data of invoices issued and received”
• Italy: Mandatory e-invoicing?
EMEA
• South Africa: VAT rate increase
• GCC – where are we?
• UAE: What's been released ? What's missing? Designated Zones
NOAM
• USA: Landmark sales tax nexus case to be heard in Supreme Court
APAC
• India: GST update
• China: Further VAT reform
• Malaysia: GST Compliance Assurance Program (MyGCAP)
• Singapore: Future GST rate increase / reverse charge
• Australia: Final guidance published for online retailers - GST on low value imported goods
This publication has been prepared only as a high level guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication.
China: Tax Bulletin-Latest update on VAT RegulationsAlex Baulf
Subsequent to Grant Thornton China's last update in July 2017, this VAT Alert summarizes some of the further significant changes on VAT regulations for your reference.
- Revision of the “Provisional Regulations of the People's Republic of China on Value-added Tax” (Referred to as “VAT regulation revision 2017“)
- Clarification on Input VAT Issues
- VAT regulations on specified financial products
- Changes on VAT invoices
- Simplified tax administration on registration of general VAT payers
India: Recommendations from GST Council in 25th meeting Alex Baulf
The GST council in its 25th council meeting held on 18 January 2018 in New Delhi, recommended various changes to the GST law. The changes, inter alia, include revision of rates applicable to certain goods/services, introduction of exemptions, and rationalisation of various existing exemptions etc.
Serbia: Tax Alert - Amendments of Serbian Tax Laws (Dec 2017)Alex Baulf
On 14 December 2017, the Serbian Parliament adopted amendments to the VAT Law, which were published in the Official Gazette of the Republic of Serbia No.113/2017.
The adopted amendments will go into force on January 1 2018, with exception of certain provisions for which it is particularly emphasized.
On 14 December 2017, the Serbian Parliament adopted amendments to the Corporate Income Tax Law, which were published in the Official Gazette of the Republic of Serbia No.113/2017.
The adopted amendments will go into force on January 1 2018, with exception of provisions regulating withholding taxation. The majority of provisions shall be applied starting from the filing of tax return for 2018.
Please see a high level overview of these changes in the Tax Alert from Grant Thornton Serbia.
USA: NY - New York Appellate Division Holds Certain Data Information Services...Alex Baulf
The New York Supreme Court, Appellate Division has held that the competitive price reports purchased by a supermarket retailer were considered to be information services that qualified for a statutory exclusion from sales tax. The Court concluded that the information services were excluded from sales tax because the information was personal or individual in nature and was not substantially incorporated into reports of others.
UK: Briefing Paper - Are you ready for Making Tax Digital? Alex Baulf
The UK government is going ahead with its Making Tax Digital (“MTD”) programme, starting with VAT-registered taxpayers. From 1 April 2019, businesses with a turnover above the VAT registration threshold will be required to keep specified minimum records in the VAT account and to submit the current nine- box VAT return to HMRC via Application Program Interface (“API”) software (linking either the accounting system or excel spreadsheets to the HMRC system).
The document lists the names of people working on a project from June 2017 to October 2017. It includes 3 project leaders - 包孝先, 吴江娇, and 杨颖. Other contributors were 周自吉, 张斌, and 徐瑛. The document provides an inventory of staff involved in the project during this time period but does not include any other details.
Cyprus: VAT Alert - VAT on building land, leasing of commercial immovable pro...Alex Baulf
Following much anticipation and speculation the Cyprus Parliament has enacted far reaching amendments to the Cyprus VAT Law on 3/11/2017 which impact transactions related to immovable property. The amending legislation (N157(1) of 2017) was published in the Official Gazette of the Republic of Cyprus on 13/11/2017.
• A significant part of the aforementioned changes involve the imposition of VAT on the supply of land. These amendments to the Cyprus VAT Law were a condition of Cyprus’ accession to the EU in 1/5/2004 for which a derogation was secured until 31/12/2007. Their enactment brings Cyprus in line with the obligations undertaken within this scope.
Saudi Arabia - VAT Frequently Asked QuestionsAlex Baulf
The document provides frequently asked questions about Saudi Arabia's VAT system. It discusses VAT eligibility and registration processes, including registration thresholds, group registrations, and mandatory vs voluntary registration. It also covers VAT procedures such as return filing frequencies, invoice requirements, record keeping obligations, and interactions with other governmental entities.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
2. As a result of digital disruption, companies need to askand
understand“What business is mycompanyin?” Forexample
are you a manufacturerofaproduct ora manufacturer ofa
product combined withthesaleof advanced analytic services?
With so manynew and emerging technologies, business
models, and customerpreferences, every companyneeds to
stress test its business strategyto ensureit is targeting the
right customers, products, and services to maximize
opportunities alignedto theircompetitiveadvantage. In doing
so, a company’s C-suiteshould considerthefollowing
questions as it assesses theimpact ofdigital across the
business enterpriseand theresultingtax implications:
What is yourcompany’s shareofthe25% of GDP
of theglobal digital economy?
How is technology, such as connected devices and
dataanalytics, going to disrupt mycompany’s
products, services and valuechains?
How will mycompanyintegrateeffective tax
planning intoits evolving businessstrategy?
II. Impact across the Business
Enterprise
Todaywelive in a world wheresocial networking, mobile
devices, thecloud, big data, analytics, sensors and evolving
digital technologies areubiquitous. Therealityis digital
impacts theway businesses operatewith customers, suppliers
and employees. Digital impacts themarketing, selling,
production and distribution ofbothproducts and services.
Digital impacts thewaycustomers behaveand interact with
businesses.
A mere20 years ago successful businesses focused on
seamless integrationoftheirmanufacturing, supplychain,
distributionand sales functions to create efficiency that drove
down costs and increased revenue. Overlapping this
traditional model business changewas limited, to alarge
degree, to a company’s ERPsystem.In manycases the
functions ofthecompanywerenot portable.
With today’s technology, research and development can be
successfully conducted from multiplelocations using labour
savings in countries such as Indiaand thePhilippines.
Companies engaged in B2Cecommercecan rely on shipping
companies to supplementtheirdistributionsystems.
Marketing is no longerlimited to asales force on theground
but is complemented bytheinternet which has national and
global reach to new global markets.
In thenext 10 years thedigital economywill continueto
create new revenuestreams. Forexample, dataanalytics
permits companiesto driveexternal new revenuestreams or
increase sales. For example
a manufacturing companywhich sells machines in
thefuturewill havethosemachines connected to
theinternet and will, fora service fee, collect data
which will be converted using advanced analytics
into informationthecustomercan useto determine
when and how to optimallymaintain themachine
A well-knownretailerhas an app for smart phones
which remembers when customers comein their
storeand what theyhave purchased. Thecustomer
mayplan to spend $100 but during thevisit receives
coupons and reminders on thingsto buy. At the
cash register $200are spent.
In thesebusiness models thepoint ofsalebecomes blurred.
Is thelocation for tax purposes where:
Theconsumeris?
Theserver with thesoftwareis located?
Wherethe datascientists providing theservice is
located?
Theimpact of thedigital economyis not limited to theB2C
or B2B space. The digital economywill also transform how
businesses operate. Theoverarching themeis that big data, if
captured and used effectively, will enablecompanies to work
smarter, faster, and moreefficiently.
For example, dataanalytics is impacting internal enterprise
functions, including thewaybusinesses operatewith
suppliers and employees, productionand sales, and
distribution. Usingtheprocurementfunctionas an example,
based on working with customers to create procurement
efficiencies wehave seen thefollowing results:
decrease procurement costs by7%
decrease production costs by10%
Thenext decade will see a significant increase in how digital
impacts thebusiness enterprise in ways not currently
imagined today
Onelesson companies havelearned is that theirdigital
business model will continueto changeat a rapid pace (e.g.
thinkofhow often you haveupdatedyourmobilephone and
thesoftwarethat runs it and therelated technological changes
over time). Successful companies will bethosewhich embrace
and anticipatedigital change and havetheframework to
execute on a real timebasis changes in theirstrategy. An
effective tax strategywill need to keep up with changes in the
business whileat thesametimedeal with tax authorities
including amyriad ofhistorical and ever changing tax laws
and regulations.
III. Tax Strategy Alignment with Your
Digital Strategy
Developing effective tax planning requires alignment with
yourdigital strategyand flexibilityto changethetax strategy
over timeas yourdigital strategychanges. Yourdigital
3. strategymayincludeaspects related to mobile, social media,
cloud, dataprivacy and cyber security. You will need to
considerhow yourtax strategyneeds to be modifiedto
considereach of thesekey business elements.To effectively
managetax costs we recommend aholisticapproach to
address global direct, indirect, withholding, and personnel
taxes.
Tax Lawsand Tax AuthoritiesStruggle to Keep Pace with “Digital
Disruption”: Taxpayer’sRisk
Countries and tax jurisdictions arehungryforrevenueand are
seeking ways to increase revenuethrough direct and indirect
taxes. At the sametimetax authorities and politicians arevery
concerned about thedigital worldand getting theirfairshare
of taxes related to thedigital economyprofits enabledby
portabletechnologyand information.
TheOrganization forEconomicCo-operation and
Developments (OECD) best describes theenvironment as
"the digital economy is increasinglybecomingthe economyitself, it would
be difficult, if notimpossible, to ring-fence the digital economyfromthe
rest of the economyfor tax purposes."TheOECD has
acknowledged that “the digital economycontinuesto develop, it is
important tocontinue workingon these issues andto monitor
developments over time.” In recognition ofthecomplex fluid
environment theOECD has recommended “A report reflecting
the outcomeof the continuedwork in relationto the digital economy
shouldbe producedby 2020.”5
Thepace of technologychanges and theglobal political and
economicenvironment createongoing tensionbetween
certain and uncertain tax results,changing tax laws, and
regulations. Existing federal, state, and foreign tax laws were
typically not enacted to anticipate futuretechnological
changes. Howevertoday, manytax authoritiesarechanging,
or contemplating changing,tax laws in responseto current
technological advances and entrepreneurial and corporate
applications oftechnology.
All businesses, regardlessofsize, will continueto innovatein
developing new products and services and bring them into
themarketplace. Technologydevelopment is likelyto
continueto outpacetheabilityoftax authorities to create tax
legislation to address technologychanges.
Thetax risks and opportunities presentedbythedigital age
are illustrated bythefact that key tax issues mayvaryby type
of tax and by tax jurisdiction.
5 OECD report issued October5, 2015
IV. Tax Considerations to Avoid
Double Taxation
Thedirect and indirect tax issues a companyengaged in the
digital world needs to analysewill depend onthecountry or
stateit is located in, the countries orstates it interacts with,
and whetherits focus is intercompanyorthird partydigital
transactions. Thekey tax factors to considerare:
Nexus to paytax in the digital economy
Characterization oftransaction: What did I sell?
Sourcing ofrevenue
TransferPricing and BaseErosion and Profit
Shifting (“BEPS”)
Merger and Acquisition tax implications
ValueAdded Tax (VAT)
Nexusto pay tax in the digital economy
Determining nexus to paytax (i.e. also referred to as a
permanent establishment)in thedigital economycontinues to
evolveand requires ongoing analysisforcompanies to
develop effective tax planning. Werecommend companies
review theirtax digital footprint on aregularbasis, at least
annually, and wheneverthereis a significant event such as a
mergeror acquisition ora significant changein tax legislation
to updatetheirtax planning. Thestarting point foreffective
tax planning is havingagood baselineofyourtax digital
footprint and aprocess in place to updateyourtax footprint
for changes in yourdigital/business strategy, such as
expanding marketsordevelopment of new types of
technology, etc.
Since digital is portable, therewill beopportunities to
considermoving profitabledigital activities to lowertax
jurisdictions as long as the moveis driven bybusiness
purposeand has substance. Even ifthe businessis not ready
for international expansion, significant stateand local tax
benefits can be achieved by effectively locating profitable
digital activities in optimum locations. Tax savings can be
4. achieved through minimizing tax rates, useofincome
apportionment rules and ortaking advantageof available
credits.
Characterization: What Did I Sell?
Theincomestream ofwhat you sell and its character for
direct and indirect taxes mayvary, and it maybe certain or
uncertain as to when theincomeis recognized. As new and
existing digital products and services are sold companies will
need to determinetheircharacter fortax purposes. Areyou
selling goods,services, or rights to an intangible? This
distinction maybedifficult fortechnologycompanies that are
providing softwareas aservice (SaaS), platform as aservice
(PaaS) and other“as a service” offerings sincestate and local,
federal and foreign tax authorities mayseekto characterize
thedigital transaction differentlyand often times seeka
characterization that results in tax being paid. A fundamental
tax planning questionis whetheryou get thebest tax result by
bundling (e.g. services vs product vs license) or unbundling
yourdigital offerings.
Sourcing of Revenue:
Sourcing, likecharacterization, has similartax considerations
that determinethetax consequences. At times thesourcing
maynot becertain given theevolution ofdigital revenue
streams, and therewill bedifferences in how local, national,
and foreign tax authorities determinetheappropriate
sourcing.
Query– How is this transaction taxed fordirect and indirect
tax purposes?
Theansweris this: it depends on thefunctions performed by
each of thecompanies and thelaws ofthecountries orstates
in which thecompanies do business.
Transfer Pricing and BEPS
TheOECD’s BEPSproject addresses tax avoidancestrategies
and mismatches in various tax rules to artificially shift profits
to low or no-tax locations. Theimport ofsubstancein setting
up yourglobal operations supportedbyappropriatetransfer
pricing methodologies arekey to integrating and executing an
effective tax strategyaligned to your digital strategy. Statetax
jurisdictions havealso increased theirfocus on transfer
pricing throughtheMultistateTax Commission’s Arm’s-
Length AdjustmentService, a program to increasestates
abilityto audit intercompanytransactions across statelines.
Further, an appropriatetransferpricing analysis can ensure
yourcompany’s allocation ofprofits arein line with where
valueis created.
Merger and AcquisitionsTaxImplications
Thedigital economypresents new opportunities andpitfalls
as companies seekto grow viamergers and acquisitions to
supplementtheirorganicgrowth. In duediligence, buyers will
need to considerthe nexus, characterization and sourcing of a
target’s digital business models to evaluateboththedirect and
indirect tax risk associated with theacquisition. In addition, it
will be imperativethat companiesconsidertheplanning
opportunities associated theacquisition structure, and post-
acquisition integration.
Value Added Tax (VAT)
Virtuallyevery majoreconomyoutsidetheUnited States has a
VAT orGST in place. Digital services are generallytaxable
and indeed thereis a growing trend to tax supplies ofdigital
services bynon-resident businesses. Whileabusiness
customeris generallyable to self-account forVAT/GST due,
underthereverse charge mechanism, manycountries will
require a non-resident to registerand chargeVAT/GST on
digital services supplied to privateconsumers. Thereis often
a grey area in ascertaining thebusiness status ofthecustomer,
and there is generally a requirement forthesupplierto
evidence this by obtainingand validating aVAT registration
numberfrom thecustomer. Whereanumberis not held on
file there is a riskof assessment from thetax authority.
Othercomplexities relating to VAT on digital services
include:
Evidenceof customerlocation (e.g. theEUrequires
two pieces of non-contradictoryevidencesuch as IP
address and credit card address, to achieve safe-
harbourprotection).
Selling through intermediaries such as marketplaces
/ app stores
validating VAT registrationnumbers in real-time
5. What action is required to avoid tax risk
and maximize tax opportunities in the
digital economy?
Thedigital futureis rapidlyevolving creating new ways for
companies to create revenue, decrease costs, and interact with
theircustomers, suppliers, and employees. Werecommend
you proactively engageyourtax advisor to:
Understand thevaluedrivers of yourdigital strategy
and what legal entities own thevaluedrivers and the
functions theentities perform
Review yourdigital footprint to identifyexposures
for taxablenexus
Determinethecharacter and sourcing ofyourdigital
transactions.
Implement atax strategywhich supports your digital
strategyand identifies and mitigates tax risks and
recommends appropriatetax planning strategies to
optimizeyourdigital strategy
Updateyourcurrent tax strategyfor changes in your
digital strategyand orfor changes in tax laws in the
countries in which you operate.
Next Article in the Series
Thesecond article in theseries will explorethe explosive
growth oftheconnected world “theinternet ofthings” and
thetax considerations ofconnected devices.
Who should I contact?
If you wouldlikeadvice on any ofthe points covered in this
article, pleasecontact:
Erich Pugh Randy Free
Minneapolis,US Irvine, US
T +612 677 5570 T +949 608 5311
E erich.pugh@us.gt.com E randy.free@us.gt.com
Doug Watson Martin Lambert
Minneapolis, US London, UK
T +612 677 5220 T +44 (0)20 7383 5100
E doug.watson2@us.gt.com E martin.lambert@uk.gt.com
Joseph Coniker Elizabeth Hughes
Raleigh, US London, UK
T +919 881 5893 T +44 (0)207 728 3214
E joseph.coniker@us.gt.com E elizabeth.hughes@uk.gt.com
Connect with us
grantthornton.co m
@grantthorntonus
linkd.in/grantthorntonus
6. Grant Thornton Global Digital Economy, IoT
& Data Analytics Tax Team
GT Data Analytics
Joseph Coniker Shannon Kreps
Raleigh, US Raleigh, US
T +919 881 5893 T + 919 633 4385
E joseph.coniker@us.gt.com E shannon.kreps@us.gt.com
Richard Cline
Charlotte, US
T +980 282 1980
E richard.cline@us.gt.com
GT Strategyand Performance Improvement
Chris Smith Luke Ekhoff
Bellevue, US Bellevue, US
T +425 214 9820 T +425 214 9861
E chris.smith@us.gt.com E luke.ekhoff@us.gt.com
Elliot Savoie Tim Michaels
Minneapolis, US Minneapolis, US
T +612 677 5104 T +612 677 5479
E elliot.savoie@us.gt.com E tim.michaels@us.gt.com
GT Technology Solutions
Chris Unruh John Stilwell
Overland Park, US Overland Park, US
T +913 2762 2723 T +913 272 2721
E chris.unruh@us.gt.com E luke.ekhoff@us.gt.com
GT Transfer Pricing
Nick Scott Liz Hughes
Minneapolis, US London, UK
T +612 677 5220 T +44 (0)207 728 3214
E nick.scott@us.gt.com E: elizabeth.hughes@uk.gt.com
Matt Piper
Minneapolis, US
T +612 677 5377
E matt.piper@us.gt.com
GT International Tax
Erich Pugh Randy Free
Minneapolis, US Irvine, US
T +612 677 5570 T +949 608 5311
E erich.pugh@us.gt.com E randy.free@us.gt.com
Doug Watson Stephan Baumann
Minneapolis, US Zurich, SW
T +612 677 5220 T +41 43 960 71 04
E doug.watson2@us.gt.com E stephan.baumann@ch.gt.com
Doug Wood Peter Vale
Raleigh, US Dublin, IR
T +704 632 6837 T +353 (0)1 6805 952
doug.wood@us.gt.com E peter.vale@ir.gt.com
Martin Lambert Onno Backx
London, UK Rotterdam, NL
T +44 (0)20 7383 5100 T +31 (0)1 886 769 376
E martin.lambert@uk.gt.com E onno.backx@nl.gt.com
Jennifer Zins Kyle Brandon
Minneapolis, US Minneapolis, US
T +612 677 5226 T +612 677 5269
E jennifer.zins@us.gt.com E kyle.brandon@us.gt.com
GT Industry Teams
Steve Perkins
Alexandria, US
T +703 637 2830
E steven.perkins@us.gt.com
GT Indirect Tax
Bill Lunka Alex Baulf
Minneapolis, US London, UK
T +612 677 5220 T +44 (0)20 7728 2863
E Bill.Lunka@us.gt.com E alex.baulf@uk.gt.com