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Taxand Global Survey 2015: Multinationals split over BEPS

Taxand Global Survey 2015: Multinationals split over BEPS
28 Apr 2015

Multinationals split whether BEPS will create a more sustainable global tax system

Our annual global survey of multinational CFOs has shown that multinationals are split 52% (agree) verses 48% (disagree) on whether BEPS will create a more sustainable global tax system.

Following the release of the OECD’s first seven action plan responses at the end of last year, the BEPS initiative continues to make headway with public consultation on discussion drafts pushing on at pace. 

Multinationals are already witnessing the impact of BEPS as governments and authorities drive an aggressive approach to stamping out tax avoidance loopholes and ‘exposing’ the tax affairs of corporates through greater transparency and across the media, respectively.

The global initiative will require close international co-operation, and transparency, data and reporting requirements from all countries and multinationals. Survey respondents felt that it will have a material financial and operational impact, with 83% globally believing that enhancing global tax transparency will increase the cost of compliance. 

Despite the increase in administrative burden, lack of clarity on who will have access to information and the potential for misinterpretation of the data supplied, 57% of global respondents were in favour of the BEPS proposal of reporting country by country profits.  However, there is a downside, with 83% believing tax competition will increase over next 5 years and 76% believing BEPS will make countries more competitive from a corporate tax rate perspective. 

Questions remain around the timeline for implementation of the initiative, as well as who holds the authority to implement the action plan. 52% of survey respondents believe that national tax authorities should be given responsibility to enforce BEPS at country level, whereas 38% thought the OECD would a better option. 

Frederic Donnedieu, Chairman of Taxand, said: “The OECD’s BEPS Action Plan is designed to revolutionise the taxation of companies across the globe. It is the most coordinated attempt to redefine the system to reach common objectives – in both developed and developing economies – that we have seen in some time. 

While many of the action points are still being ironed out,  once finalised, countries need to quickly create a stable tax environment that multinationals can have confidence in, by bringing these rules into law swiftly and instructing tax authorities to commit to enforcing the regulations. Multinationals are facing a new frontier- on incredibly uncertain terrain.”

Discover more: Access the Taxand Global Survey 2015: Caught in the Crossfire
Discover more: Access the press release

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Taxand's Take

Whilst the OECD aims to achieve a more sustainable global tax landscape, the lack of clarity on key issues will mean further confusion for multinationals on how they should implement BEPS operationally. The survey found that whilst 80% thought tax initiatives to fundamentally reform our international tax architecture are desirable, just 55% think this is achievable.

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