Companies seen responding to global tax reset

Initiative like the Organisation for Economic Co-operation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) project is fundamentally changing the global tax landscape.

 
For instance, Deloitte said in Summer 2016, it undertook a survey of those that attended its Global Indirect Tax client conference in Madrid and sought their views on the Indirect Tax implications of BEPS.

 
“There are a variety of views on whether the amount of indirect tax companies pay will increase or decrease as a result of BEPS”, Deloitte noted.
The key findings are: 92 percent of businesses are considering the impact of BEPS; however it is concerning that only 25 percent of indirect tax teams have close involvement in these discussions.

 
Over 50 percent of respondents think that BEPS will make international Value Added Tax (VAT) and Goods and Services Tax (GST) harder to manage.

 
Also, over 80 percent of respondents think that either BEPS will create greater uncertainty in relation to the VAT/GST treatment of cross-border transactions, or can not be sure if it will.

 
The OECD’s Base Erosion and Profit Shifting (BEPS) project is perhaps the most significant event in international taxation for many decades.
The BEPS programme seeks to increase transparency and information sharing between tax authorities and counter perceived imbalances by creating an environment that taxes profits in the country where value is added. The consequences of these changes are diverse and multi-faceted – in effect a Global Tax Reset is happening.

 
“The pace of change in the Transfer Pricing world appears to be accelerating as a result of commercial globalization and the OECD’s Base Erosion and Profit Sharing (BEPS) initiative,” it noted in its findings on trends in Transfer Pricing.

 
Corporate income tax and transfer pricing changes have been well publicized, but the indirect tax specific implications of BEPS are also far-reaching.
Tax is increasingly recognised as a significant strategic business issue that can impact an organisation’s competitiveness and its brand.
For multinationals, identifying risks and opportunities from global tax landscape is critical and will require an assessment of impact, weighing of options, regular monitoring, and development of a strategic plan, including a communications strategy.