UK moves up tax competitiveness ranks
First published in Tax Journal, 26 June 2014
The UK has moved from 3rd to 2nd position in the rankings of ten major countries’ tax systems, according to KPMG International in its biennial Competitive alternatives: focus on tax study.
The study was published as Frederic Donnedieu, chairman of Taxand, commented on the ‘global tax rate race to the bottom’ after the announcement that Spain was to reduce its corporation tax rate from 30% to 25%. Donnedieu pointed out that Japan, the UK and Greece were pursuing a similar agenda. He also referred to Taxand’s recent global survey of CFOs which revealed that 84% of respondents anticipated that tax competitiveness between countries would increase over the next five years.
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As governments remain focused on addressing budget deficits and pleasing voters with promises of employment and investment, the tax ‘race to the bottom’ will continue. However as countries fight to go ever lower, the question remains over whether there can be a winner.