TaxCorporate TaxMultinationals shy away from risky tax planning

Multinationals shy away from risky tax planning

Companies reluctant to use aggressive tax planning - especially those in Asia - says Ernst & Young report

asia map

International companies, particularly those in Asia, are shying away from
risky tax planning as tax authorities crackdown on
aggressive avoidance, and reporting requirements tighten.

An international survey by
Ernst
& Young
of 470 companies in 14 countries found that Asian
business had become especially cautious, with just over 50% of the respondents
in China, Australia, Hong Kong and China becoming more risk averse in their tax
planning over the last two years.

In Europe and North America, only 27% and 22% of those polled expected to
become more cautious in their approach to tax planning. But Ernst &
Young said this was due to the earlier introduction of tax regulation in the
West, which limited the effectiveness of tax planning.

Increased scrutiny, however, was also playing a role in the approach to tax
planning, as companies aimed to reduce financial and reputational risks.

The report found that tax financial reporting had
increased by 14%, while the time spent on planning and routine tax compliance
had reduced by 8% and 13% respectively.

Further reading:

Read the full survey
here

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