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The results of a new survey of 250 senior U.S. corporate tax officers from KPMG (an audit, tax, and advisory firm) show that many companies are lost when it comes to the tax implications of doing business in the cloud. This confusion leads to missed cost savings and possibly tax problems if companies don’t get smart about the rules of the cloud.
The survey cites lack of awareness as the key issue — tax issues aren’t part of a cloud strategy or implementation. For example, nearly all (92 percent) of the survey respondents said they have not taken advantage of state and local tax credits for cloud investment.
The problem is that the people who implement cloud strategies are not accountants or tax attorneys, and they typically don’t consult with those guys. I know I don’t. As a result, many of us are leaving money on the table — or not paying taxes that are due. Honestly, all most of us know is that deferring a purchase or moving it forward can affect capital deductions, and sometimes there’s a tax reason to move from buying to leasing.
To correct this ignorance, I propose a bold departure from the norm: We need to include the finance department in the cloud computing lifecycle, specifically the tax management people. Are there credits available not being used? Are there tax compliance issues to address, perhaps related to doing business in a new location or through an on-demand service versus hiring a firm? Direct those questions to your money people.
Source: Associated Press