Which APAC sectors are most vulnerable to tax and regulatory exposures?

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Cross-Border Structures Face Significant Tax and Regulatory Exposures in APAC

In the Asia Pacific region, the analysis of transaction risk claims reveals that entities engaged in cross-border structures are particularly susceptible to tax and regulatory exposures. These exposures are a key driver of some of the largest and most complex claims, often materialising several years after a deal has been completed, thus contributing to a pronounced long-tail risk profile for businesses operating in this sphere.
Tax and Regulatory Exposures Drive Complex Claims

The Aon 2026 Global Transaction Solutions Claims Study underscores that tax and regulatory issues are consistently at the forefront of significant and intricate claims within the APAC region. These exposures frequently manifest well after the initial transaction closure, extending the potential period for claims to be lodged and contributing to the long-tail risk characteristic of the market. While operational and disclosure-related matters tend to surface within the first year post-deal, tax-related claims can be reported more than five years after the policy's inception.
Cross-Border Structures Highlighted for Vulnerability

Specifically, the study identifies distinct patterns of loss across various industries, with cross-border structures being singled out for their inherent tax and regulatory exposures. These are often associated with multinational corporations and complex financing arrangements, where the intricate web of international tax laws and differing regulatory frameworks create fertile ground for disputes and claims.
Long-Tail Risk Profile Characterises Tax-Related Claims

The protracted nature of tax-related claims is a significant factor in the APAC region's risk landscape. While issues concerning operations and disclosures typically become apparent within the first year of a transaction's completion, tax disputes, including those involving transfer pricing, customs duties, and withholding obligations, can take considerably longer to emerge. This extended latency period means that businesses must maintain vigilance and preparedness for potential claims extending many years into the future.

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Which APAC sectors are most vulnerable to tax and regulatory exposures?

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