Future of the tax system


By Daniel Hunter

A report launched this week found that among 1,000 European company tax directors, almost half (44%) of respondents thought more certainty about the future of the tax system, followed by simplification of the tax system (36%) were the two most important changes to their country’s tax legislation.

Deloitte asked them about the challenges they face doing business in Europe and the majority of respondents (61%) thought it was due to a high degree of tax uncertainty in their own country. They cited frequent changes to legislation (75%), and ambiguity, weakness and reversals in the tax authorities’ doctrine of publicly available guidance (50%) as the main challenges.

Companies may be subject to new and sometimes conflicting pressures when it comes to tax. In some countries, action groups and media campaigns have woken public interest in both how much tax companies pay and where they pay it. In the UK companies have been questioned by the House of Commons Public Accounts Committee over their tax affairs in the past year and this scrutiny is likely to continue.

Andrew Hodge, head of tax at Deloitte in the UK, said: “Above all heads of tax want stable tax legislation, as they believe it will have the most positive impact on their country’s commercial competitiveness. They do not like uncertainty and they cite frequent legislative change as the thing that they would reduce in order to make their own countries more competitive.

“Of course, there is major change coming soon with the OECD’s objective of providing comprehensive, balanced and effective strategies for countries concerned with base erosion and profit shifting, and this inevitably adds further uncertainty even if the goals of the OECD are well understood.”

Attracting businesses to the UK is important and the UK (31%) and Netherlands (40%) are seen as the preferred large tax... continued on page two >


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