KPMG Forms Tax Practice to Meet

International accounting, tax and consulting firm KPMG LLP announced today that it has formed a new e-commerce tax services practice. The company believes that the rise of e-commerce is causing a demand for new tax models and other related services.

One of the world’s largest consulting firms, KPMG said that its new service will offer end-to-end solutions to global corporations, regulatory agencies and government jurisdictions who are wrestling with the prospect of Internet taxation and other requirements.

The Mountain View, California-based company appointed Nilesh Shah, former head of KPMG’s Tax Knowledge Management practice, as head of the new e-commerce tax services practice.

“With the ever-rising flood of e-business, the Internet is exercising increasing influence on overall business practices and models,” said John Lanning, KPMG vice-chairman. “Given that, we are extremely pleased to announce the official launch of KPMG’s Electronic Commerce Tax Services practice.”

Taxation Vexation

Shah and other members of the new KPMG practice are getting a preview of the future at the Advisory Commission on Electronic Commerce meetings being held yesterday and today in New York City.

The new KPMG e-commerce tax head has represented the company at several discussions and has authored articles on Internet taxation. The 19-member commission — which is made up of Internet industry executives, trade groups and government officials on the local, state and federal level — will submit its report to Congress by April of next year.

Internet Gravitation

Last month, KPMG announced that Cisco Systems will be investing more than $1 billion (US$) in its Internet services business, particularly focusing on telecommunications and enterprise markets.

The relationship with Cisco calls for KPMG to add 4,000 Internet engineers over the next 18 months to develop Internet-based data, voice and video services for Cisco’s clients. KPMG will build six Internet innovation centers as well. The deal, which still requires regulatory approval, is expected to close this month.

KPMG also revealed plans to incorporate its consulting practice and launch an initial public offering for the spin-off sometime next year. The firm is hoping that the market will recognize its relationship with Cisco and value the company accordingly.