Tax

We have experience in all areas of tax based asset finance, including aviation, shipping, rail and commercial property.

We advise many of the world’s leading financial institutions and corporations on domestic and crossborder transactions.

Many of the world’s leading banks and financial institutions turn to Allen & Overy for help with their most important and innovative deals. Our international Tax group has a great deal of expertise and advises on a rage of products from bilateral and syndicated loans, to leveraged acquisition and project finance

We advise on corporate reorganisations and restructurings as well as commercial transactions, including domestic and cross-border mergers and acquisitions, demergers, capital raising, joint ventures, tax efficient holding company and financing structures and permanent establishment issues. Our client base includes corporations involved in banking and finance, energy, insurance, manufacturing, retail, technology, media, public utility, construction, shipping, aircraft, transport, property and engineering.

Tax considerations are important in real estate transactions, particularly those that are complex and innovative. We work with our real estate colleagues, providing expert tax advice on every type of real estate transaction.

Indirect taxes are the most risk-triggering tax areas for mistakes, e.g. in the IT-settings, and usually have a tremendous effect (often in the two or three-digit million range). Moreover, the regulatory environment is changing fast in this area and it is impossible to continuously adapt the systems and processes to these developments. We have extensive experience in advising clients with regard to all questions relating to indirect taxes and we cover the full range – be it “simple” questions in the day-to-day business, questions relating to IT-settings, or in the context of a complex asset-finance transaction or an M&A deal.

Allen & Overy is one of the world’s leading International Capital Markets practices and tax plays a key role in this work. Our international Tax team is involved in the full range of transactions including debt capital markets, derivatives, equity capital markets, Islamic finance, securitisations, structured finance and structured retail products.

We offer cross-border expertise on regulated funds, hedge funds, infrastructure funds, private equity funds, real estate funds and structured funds. Our work covers the structuring of new funds and reviewing fund structures for prospective investors. We also advise managers about ongoing tax issues.

Our restructuring practice operates at the forefront of a changing market. We provide tax advice to distressed companies, insolvency practitioners, banks and funds.

The focus of the work of the tax department is changing. Previously, tax departments invested most of their time in the preparation of tax returns and in defending its position within tax audits. In this respect, a tax department was often regarded as a specialist department acting as in an ivory tower, detached from the business processes. This role no longer meets today's requirements. Processes are increasingly viewed end-to-end and it is expected that tax requirements are anchored as an integral part of business processes. To achieve this, a tax department has to integrate itself very actively into the business processes, in order to understand them in detail and to be able to define tax requirements. This change of perspective has a major impact on the role of a tax department and its processes, and requires a transformation of the tax organisation. We have extensive experience in defining tax-relevant requirements, anchoring them in business processes and supporting tax departments within their transformation.

All of our major offices have experience advising clients on tax audits and their relationship with local tax authorities, national courts or European legislative bodies. We regularly deal with domestic and cross-border disputes and investigations.

In today’s tax world, reliable tax data is becoming more and more an asset as the most recent examples, such as the expansion of the CBC reporting obligation, the introduction of a new tax reporting standard for sustainability purposes and the global minimum taxation, show. In this regard, the tax department not only needs to ensure that the relevant data is available, but also that it is of a good quality and consistent.  Thus, it becomes increasingly important to analyse the data prior to its publication in order to detect abnormalities or inconsistencies. In addition, CFOs need reliable information about the development of the ETR as their planning and tax departments must be prepared with the latest data available at all times (and not just at the end of the year). We have extensive expertise in supporting tax departments in preparing, structuring and analysing the relevant data. Together with our tech team, we support clients in developing data models and workflows, as well as in defining analysis routines and formats for visualising the results.

Frequent changes of law make this a very innovative and challenging area and we are one of the few tax departments that are trusted by clients to advise on and implement their ideas.

When companies intend to correct already filed tax returns on the basis of Sec. 153 General Tax Code, the fiscal authorities will examine to what extent the acting persons were possibly aware of such mistake when filing the tax return. In this situation, the company will have to provide evidence showing that proper processes and controls were in place and that the mistake was a simple working error and not the result of poor organisation. Practical experience shows: if the company cannot prove the existence of a state-of-the-art tax control system/tax compliance management system, it is most likely that further (criminal) investigations will be initiated. We have a great track record in advising companies and their responsible persons in designing and implementing their tax compliance management systems.

Transfer Pricing is a key focus area in tax audits and the regulations are subject to rapid and fundamental changes. For example, the Best Method Rule has been replaced by the general OECD principles, the DEMPE approach has found its way into German law, and taxpayers have to base their pricing on the median of the bandwidth – just to mention some of the most recent changes. This all leads to massive uncertainty and multinational companies will constantly have to review their transfer pricing model in order to ensure that these are still up to date. Together with our international network, we advise multinationals in establishing solid Transfer Pricing structures and in defending those structures in future tax audits.