Oil and gas sector '˜under threat from new tax regime'

A new international tax regime presents a serious risk to the regeneration of the oil and gas sector, a top tax expert has warned.

Campbell Dallas chairman Ian Williams. Picture: Fraser Band

Ian Williams, chairmam of accounting firm Campbell Dallas, said he was concerned that, in the rush to cut costs, firms could overlook new OECD rules regarding “base erosion and profits shifting”.

Speaking ahead of the Offshore Technology Conference (OTC), which starts today in Houston, Williams said: “Restructuring creates a ‘trail’ of liabilities that need to be disclosed in line with the new international tax order. When a business is focused on cost cutting and survival, it often loses sight of its tax liabilities. It is important that delegates to OTC ensure international tax is considered during discussions on restructuring”.

He added: “Companies will need to be more transparent, publish their tax strategy, demonstrate compliance, and be open to public scrutiny on matters which were previously confidential.”

Williams warned that large-scale tax planning opportunities “will virtually be absent” as common cross-border tax structures will no longer offer meaningful cost savings on the effective tax rates in each market.

“It has never been easier for a tax authority to analyse the performance of a business in each of its locations,” he said.

“Effective use of technology, local knowledge and a new range of systems and processes will help businesses comply. If businesses do not want to be caught out by international tax, they must ensure they are fully aware of the new rules – none more so than for companies undergoing restructuring.”