KPMG Australia launches Crypto Tax Estimator for traders

16 November 2018 Consultancy.com.au

Understanding tax obligations for Australian crypto-traders has just gotten a whole lot easier thanks to global professional services firm KPMG’s new Crypto Tax Estimator.

The concept originally emanated from a KPMG hackathon in 2016 and has since been built into a fully fledged tool. The app takes into account multiple factors including capital gains tax and the removal of ‘double taxation’ burden from local GST (general goods and services tax).

As cryptocurrencies continue to evolve at a dramatic pace, regulators and governments around the world are attempting to keep pace. Tax obligations are just one of many difficult questions raised when considering blockchain technology, with others including anonymity of transactions, money laundering, the potential to fund terrorism and security of funds.

That being said, there are many uses for blockchain technologies that are having a positive impact on society, with a decentralised public ledger it is easier to prevent corruption and fraud. Cryptocurrencies have also hailed in the new wave of investment funds, allowing more entrepreneurs to access capital at unprecedented rates, decentralising venture capital and shifting from an outdated system.

KPMG Australia launches Crypto Tax Estimator

With such a large list of potential uses and serious risks involved, globally governments have been shocked by the arrival of blockchain technology. At first, governments wanted to kill it off, to ban it outright and one way to do this is through taxation. However, over time the technology evolved to become the talking point of even mum and dad dinner parties, creating a shift of heart.

Blockchain fits into a greater wave of new financial technology or Fintech which is driving growth in Silicone Valley and throughout Greater China. Other smaller destinations – such as Singapore, Hong Kong, Switzerland, Estonia and the Cayman Islands – are competing by relaxing their regulations to foster a culture of innovation and attract start-ups.

Australia as is often the case, has had a wait-and-see approach. That is until the past year or so, when the potential uses and benefits of the technology have shot into the public sphere with the dramatic rise of Bitcoin prices. Although the bubble burst, blockchain itself continued to attract investment and has turned heads in the government who aim to see the Australian economy shift to technology driven.

Innovation has been led by such notable organisations such as the Australian Stock Exchange – who have been listing cryptocurrency exchanges since 2014 and IBM’s partnership with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to pilot an Australian National Blockchain network.

“Cryptocurrency markets are growing at a rapid rate across the world, and it is important both for the crypto traders and governments that taxation rules and tools evolve to keep up with this fast-emerging area,”
– Laszlo Peter, KPMG

Another large player in the scene is the global management and strategy consulting industry who are partnering with, acquiring, incubating and investing in Fintech startups left, right and centre. Each of the Big Four firms along with BCG and Bain, McKinsey and Accenture are heading up a global push for blockchain innovation. In Australia, KPMG have taken the lead in this regard with their latest invention; Crypto Tax Estimator.

“It is estimated that hundreds of thousands of Australian companies and individuals are trading crypto assets. But in this complex and fast-emerging area, there are few sources of guidance that can help people easily understand the potential tax implications of trading, such as capital gains tax,” said Laszlo Peter, KPMG Australia’s head of blockchain services.

“The possibility of being non-compliant is a major source of legal risk, and we want to provide an easy-to-use tool that may assist participants in the newly emerging token-based economy to understand their tax obligations,” he added.

The intention of the new tool is to open up the the crypto market and make it more attractive for local retailers and institutional investors. This is one of the first that tools that can directly plugin to crypto exchange, Independent Reserve and is lent a high level of legitimacy due to KPMG’s backing. The tool will protect investors and ensure that they comply with Australia’s tax regulations when they trade Bitcoin, Bitcoin Cash, Ethereum, Litecoin and XRP.

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Partners in Performance launches digital transformation unit

25 April 2019 Consultancy.com.au

Australian-origin management consulting firm Partners in Performance (PIP) has launched a new unit dedicated to digital transformation, bringing together offerings for technology and human capital.

The move comes at a time when digital has become a top strategic priority for organisations of all sizes. “Technology is creating new ways of operating, raising expectations and enabling new business models,” explained Gerd Schenkel, leader of the new wing PIP Digital.

Leveraging technology, companies are bolstering the way they identify and engage with customers and optimise customer experiences, and in parallel improving their internal operations including manufacturing and supply chain, as well as back-office functions such as human resources. Meanwhile, government institutions are embracing digitisation to enhance their provision of public services to businesses and citizens, while applying smart tooling to improve activities such as tax collection, fraud detection and public safety. 

In a KPMG survey on strategic priorities of Australia’s C-suite leaders in the private and public sector, digital transformation came out on top as the top factor, ahead of innovation and regulation. The growing opportunities and burning platform for adopting emerging technologies is resulting in a rapid growth in digital transformation spending. According to analyst firm IDC, global spending on digital transformation was up 18% last year to $1.18 trillion – an amount almost equal to the GDP of countries such as Australia and Indonesia.

Partners in Performance launches digital transformation unit

As part of their digital endeavours, organisations frequently turn to external experts for support, including management consultants, with the market for digital transformation consultancy booming. In Australia, digitisation is now the number one growth driver of the country’s US$5 billion consulting industry, with data & analytics, moves to cloud-based systems, Industry 4.0 and robotics process automation among the most in-demand solutions. 

A large number of digital transformation programmes however do not achieve the goals set; one estimate places the share of failed or suboptimal transitions at two thirds of all transformations. “We’ve observed many traditional attempts at digital transformation fail for a variety of reasons,” Schenkel agreed. 

PIP Digital has been setup to help customers approach digital transformation in an integral manner, “ensuring technology and people work in sync”, a mix which is set to enable the delivery of lasting results. Schenkel: “It has been disappointing to see many organisations being seduced into deploying canned technology as a core part of their digital agendas, overlooking the critical need to design new business models and processes around humans and their needs. We are here to close a gap in the market.”

He continued, “With our new service offer, Partners in Performance will provide a fresh approach to how organisations approach their digital agenda.” To this end, PIP Digital has brought together already present digital expertise across Partners in Performance’s footprint, spanning among others technology (led by Phil Ridley), analytics (Juan Ferrara), customer experience (Steven Henderson), and back office transformation (Malcolm Allen). Partners in Performance launched in Australia in 1996 and today has over 300 consultants across offices in Australia & New Zealand, Asia, Middle East, Europe and the Americas.

Schenkel has been brought on board to establish and grow the arm, bringing a wealth of experience in the digital realm to the consulting firm. He formerly was the CEO of payment company Tyro, an Executive Director of Telstra Digital and was the founder of UBank, NAB’s digital bank. “If executed  well, then digitisation can be a powerful opportunity for companies to stand out from their competitors and open up new growth avenues,” he concluded.

Other larger consulting firms with a dedicated digital arm include Deloitte (Deloitte Digital), McKinsey & Company (McKinsey Digital), Boston Consulting Group (BCG Platinion, BCG Gamma and BCG Digital Ventures), Bain & Company (Bain Digital) and PwC (PwC Digital).