Increased Dialogue Between Authorities and Multinationals
Multinationals have seen a marked improvement in their relationship with tax authorities over the last year, with 84% seeing further progress, up from 61% in 2011.The sheer speed with which the world’s tax administrations joined forces is astonishing, with taxpayers’ data and information being shared at remarkable rates. Tax agreements have grown from relatively few to over 700 in only the last few years.
Keith O’Donnell, Taxand Global Real Estate Service Line Leader, perceives a downside to these agreements:
“As tax administrations around the world gather and strengthen taxpayer information, there is good reason to believe that issues with one country’s tax audit can quickly grow into controversy in other nations, potentially leading to greater complexity in dealing with multiple adjustments that are not consistent across countries. To date, tax authorities’ appetite to collect more information cross-border is not matched by an appetite to quickly and efficiently deal with so called “competent authority” matters on a multilateral basis.”
Given the ever-increasing pace of information exchange, multinationals need to focus more than ever on adequate and accurate record-keeping.
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