Taking the TP pulse on regulation and transformation

Aided by the end to a record-low interest rate environment, 2023 has seen the banking sector’s profitability bounce back after a period of slower growth and changing operating models, particularly for European headed banks in response to Brexit. While this is a positive news, regulators including tax authorities have sharpened their focus on banks’ operating models, governance, and risk management frameworks. Simplification of legal entity structures and centralisation of booking models have been observed as a trend in the banking sector to optimise costs and improve standardisation of support processes.

With these changes to operating models, as well as the continued prevalence of a remote workforce post-COVID, regulators including tax authorities are focused on ensuring alignment of in-jurisdiction substance and risks, and that tax governance and control frameworks operate effectively.

Read more with Deloitte specialists Ralf Heussner, Priscilla Ratilal, and Anna Lam exploring the important TP implications of these themes and issues for the banking sector over here.