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As part of a webcast in April, KPMG surveyed 1,500 respondents in the life sciences industry to gather insight on some of the key tax issues the industry is facing as a result of COVID-19 as well as changes tied to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
More than half of the respondents said cash flow and liquidity is going to be the aspect of the COVID-19 disruption that is expected to have the biggest impact on their companys’ operations. However, just under half said they had no significant concerns when asked to describe the current state of their tax departments as a result of the COVID-19 pandemic. The remaining participants reported concerns on meeting tax compliance due to resource restraints.
In line with most of the respondents currently not having significant concerns, the majority also had either not thought about changes to transfer pricing or do not anticipate changes at all. Of the 1,500 respondents, only 9% are planning on or had already made changes.
When asked to look into the more immediate future for the second quarter of 2020, ending on June 30, more than half of the respondents were not sure where their organizations would be. Of the remaining respondents, most of them said they would be stagnant or a seller of assets to preserve cash.
For a return to normalcy, 43% of the respondents anticipated having their businesses back to normal in six months. Only 16% anticipated greater than 12 months while 17% were optimistic and said three months. The remaining 24% anticipate 12 months.
For more information, click here to access the replay of the KPMG COVID-19 Disruption in Life Sciences: Tax, Trade and Value Chain Implications webcast.