Global Assets Under Management (AUMs) are set to swell to $102 trillion in 2020 and the tax function would play a critical role in determining front-runners in this space going forward, a PwC report says.
According to PwC, the tax function, which is about to undergo a significant change, will be critical in determining those players in the market who will be best positioned to win greater share of business in the next five years.
“In 2020, investors’ expectations will include a robust and efficient tax infrastructure. And zero tolerance of tax uncertainty or tax adjustments,” the report titled ‘Asset Management 2020 and beyond’ said.
It noted that as banks and insurers retreat from many business lines, asset managers are becoming more influential across a range of products, creating a new breed of global mega-managers.
“In-house asset management tax teams will need to evolve to deal with perpetual audits and to engage with tax authorities on a frequent basis to influence policy and help guide the implementation of tax rules,” William Taggart, Global Tax Leader, Asset Management, PwC, said.
By 2020, tax authorities would have specialist teams with the capabilities to carry out much more detailed enquiries than in the past, and the powers to request real-time investor-related information.
“Asset managers will need to ensure highly-skilled tax people are brought into the heart of the business. The tone needs to be set at the top. The tax function is critical to the entire operation and senior management will need to make sure this is well understood,” Taggart added.