Taxand is pleased to announce the results of our second annual Taxand Global Survey The survey was conducted with an exclusive selection of our large, multinational clients located across the Americas, Europe and Asia, in order to examine the pressing tax challenges affecting businesses today.
See highlights of the survey results below, and Taxand's Take on some of the key issues revealed in the report.
Highlights
- Tax Moves Up Board Agendas - unprecedented change at rapid speed increases the importance of tax by 16%
- Multinationals Battle for Investment - now the largest growing concern for multinationals (an increase of 5%)
- Harmonisation - the Double-Edged Sword - 75% multinationals desire tax harmonisation. At what cost?
- Increased Dialogue Between Authorities and Multinationals - 84% multinationals cite improved relationship with tax authorities
- The Rise of Citizen Activism - 72% multinationals believe public exposure is/has been detrimental to company reputation
- Increased Pressure on Tax Resources - 6% increase in multinationals with tax resources under stress
- Multinationals: "Tax is Not the Answer" - 76% of our respondents believe that economic woes cannot be solved by tax policy
Taxand's Take
Here are some key steps you can take now to address the issues uncovered:
- Multinationals must ensure sufficient resources are allocated appropriately to meet rising demands from tax authorities
- Be prepared to report, be quick to respond, and use all tools in disputes
- To ward off unwanted scrutiny, multinationals should establish protocols, regularly document the status of tax audits and focus on accurate record-keeping
- Only engage in commercially driven transactions and beware of retrospective legislation
- Keep abreast of change and consider operational structures to maximise competitive moves for investment
- Multinationals beware of the political will for information exchange, and the consequent compliance costs.
FOREWORD
Our second Taxand Global Survey has captured some thought provoking reactions from multinational CFOs following a year of rapid change as economies have sought to drive efficencies within their tax systems.
In this year’s survey we compare year-on-year results, highlight the latest global tax issues and provide Taxand’s take on how multinationals can adjust to tax changes to operate ever more effectively in this demanding environment.
Multinationals say tax is not the answer to economic woes
It has been a testing year for economies worldwide and tax has regularly featured in the debate around appropriate economic policy. Our survey reveals that 76% of multinationals agree that tax, in isolation, is not the answer to economic stability, albeit there is little doubt of its role in determining the attractiveness of a country for foreign investment.
Increasing pressure on resources
The tax challenges identified by multinationals are shifting and available resource is one of the biggest growing concerns for tax departments, up 6%. Multinationals must ensure that they are allocating resource appropriately.
Increasing scrutiny slowing multinational growth
Almost half (48%) of multinationals believe their expansion plans have been curbed by overzealous tax authorities, with 78% also con rming an increase in tax audits year-onyear. Companies should establish protocols for responding to requests and documenting the status of tax audits.
Public scrutiny and reputation: The rise of citizen activism
Our survey reveals a 19% increase in the number of multinationals viewing public exposure of tax planning as detrimental to reputation. The importance of demonstrating substance has risen to the fore and companies must also be aware of retrospective legislation.
Increased dialogue between authorities and multinationals
Multinationals have seen a marked improvement in relationships with tax authorities over the last year, jumping from 61% in 2011 to 84% in 2012. Given the ever-increasing pace of information exchange, multinationals must focus on adequate and accurate record-keeping.
International tax: The battle for multinational investment
Our survey highlights an increase in inter-country tax competition as governments battle to secure inward investment. This trend highlights the need for multinationals to focus on whether a region’s tax environment will support the investment rationale.
Harmonisation: The double-edged sword
There remains a desire for tax harmonisation from 75% of multinationals. Whilst many attempts to foster this are yet to come to fruition, multinationals should beware of the political will to increase information exchange and boost revenues.
Tax moving up Board agendas
The importance of tax continues to grow, with a 16% increase in the number of CFOs identifying tax as being on their Board’s agenda ‘to a great extent’. This number is only destined to increase, particularly given current economic uncertainty and the potential for change in tax systems. Moreover, although tax authorities across the globe may reduce in size, they will no doubt become more effective in the exchange of information across borders, radically changing the relationship between business and government.
It’s clear that multinationals are facing unprecedented change at rapid speed. Taxand remains sensitive to the careful balancing act required to satisfy shareholders, tax authorities, public perceptions and multinationals’ growth and ambitions. The need for tax to remain high on Boardroom a agendas is greater than ever.
Frederic Donnedieu de Vabres, Taxand Chairman
Download the report below (PDF 12 pages - english)
See highlights of the survey results below, and Taxand's Take on some of the key issues revealed in the report.
Highlights
- Tax Moves Up Board Agendas - unprecedented change at rapid speed increases the importance of tax by 16%
- Multinationals Battle for Investment - now the largest growing concern for multinationals (an increase of 5%)
- Harmonisation - the Double-Edged Sword - 75% multinationals desire tax harmonisation. At what cost?
- Increased Dialogue Between Authorities and Multinationals - 84% multinationals cite improved relationship with tax authorities
- The Rise of Citizen Activism - 72% multinationals believe public exposure is/has been detrimental to company reputation
- Increased Pressure on Tax Resources - 6% increase in multinationals with tax resources under stress
- Multinationals: "Tax is Not the Answer" - 76% of our respondents believe that economic woes cannot be solved by tax policy
Taxand's Take
Here are some key steps you can take now to address the issues uncovered:
- Multinationals must ensure sufficient resources are allocated appropriately to meet rising demands from tax authorities
- Be prepared to report, be quick to respond, and use all tools in disputes
- To ward off unwanted scrutiny, multinationals should establish protocols, regularly document the status of tax audits and focus on accurate record-keeping
- Only engage in commercially driven transactions and beware of retrospective legislation
- Keep abreast of change and consider operational structures to maximise competitive moves for investment
- Multinationals beware of the political will for information exchange, and the consequent compliance costs.
FOREWORD
Our second Taxand Global Survey has captured some thought provoking reactions from multinational CFOs following a year of rapid change as economies have sought to drive efficencies within their tax systems.
In this year’s survey we compare year-on-year results, highlight the latest global tax issues and provide Taxand’s take on how multinationals can adjust to tax changes to operate ever more effectively in this demanding environment.
Multinationals say tax is not the answer to economic woes
It has been a testing year for economies worldwide and tax has regularly featured in the debate around appropriate economic policy. Our survey reveals that 76% of multinationals agree that tax, in isolation, is not the answer to economic stability, albeit there is little doubt of its role in determining the attractiveness of a country for foreign investment.
Increasing pressure on resources
The tax challenges identified by multinationals are shifting and available resource is one of the biggest growing concerns for tax departments, up 6%. Multinationals must ensure that they are allocating resource appropriately.
Increasing scrutiny slowing multinational growth
Almost half (48%) of multinationals believe their expansion plans have been curbed by overzealous tax authorities, with 78% also con rming an increase in tax audits year-onyear. Companies should establish protocols for responding to requests and documenting the status of tax audits.
Public scrutiny and reputation: The rise of citizen activism
Our survey reveals a 19% increase in the number of multinationals viewing public exposure of tax planning as detrimental to reputation. The importance of demonstrating substance has risen to the fore and companies must also be aware of retrospective legislation.
Increased dialogue between authorities and multinationals
Multinationals have seen a marked improvement in relationships with tax authorities over the last year, jumping from 61% in 2011 to 84% in 2012. Given the ever-increasing pace of information exchange, multinationals must focus on adequate and accurate record-keeping.
International tax: The battle for multinational investment
Our survey highlights an increase in inter-country tax competition as governments battle to secure inward investment. This trend highlights the need for multinationals to focus on whether a region’s tax environment will support the investment rationale.
Harmonisation: The double-edged sword
There remains a desire for tax harmonisation from 75% of multinationals. Whilst many attempts to foster this are yet to come to fruition, multinationals should beware of the political will to increase information exchange and boost revenues.
Tax moving up Board agendas
The importance of tax continues to grow, with a 16% increase in the number of CFOs identifying tax as being on their Board’s agenda ‘to a great extent’. This number is only destined to increase, particularly given current economic uncertainty and the potential for change in tax systems. Moreover, although tax authorities across the globe may reduce in size, they will no doubt become more effective in the exchange of information across borders, radically changing the relationship between business and government.
It’s clear that multinationals are facing unprecedented change at rapid speed. Taxand remains sensitive to the careful balancing act required to satisfy shareholders, tax authorities, public perceptions and multinationals’ growth and ambitions. The need for tax to remain high on Boardroom a agendas is greater than ever.
Frederic Donnedieu de Vabres, Taxand Chairman
Download the report below (PDF 12 pages - english)
GlobalSurvey2012.pdf
(792.24 KB)
