MORE THAN four in five companies expect already-heightened tax risks to accelerate over the coming two years, EY has found.
A survey of 830 tax and finance executives in 25 countries, including 44 respondents from the UK, found companies view the potential lack of co-ordination by national governments around the OECD’s Base Erosion and Profit Sharing (BEPS) project as a major risk.
In particular, the risk of double-taxation arising from limited co-ordination on BEPS and potential unilateral actions by nations was a concern raised by almost a third of businesses.
That sentiment was echoed by around a third of British companies.
“International companies share the OECD’s concern that coordinated action by national governments is necessary to ensure any BEPS-related recommendations are productive.” said EY head of tax policy Chris Sanger. “The OECD can play an invaluable role in preventing what it has called a ‘global tax chaos’ that results in double taxation and increased controversy by pressing for common approaches and consistent standards.”
Away from the OECD, 68% reported that they feel tax audits have become more aggressive in the last two years, up from 57% in 2011 when the survey was last conducted. The news media has also been an even bigger driver of tax-related reputation risk, with 89% of the largest companies concerned about news media coverage of taxes, up from 60% three years ago.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
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