A global tax [ r ] Evolution The changing world of tax
Albert Baker , FCPA , FCA Deloitte Global Leader Tax Policy
Recent years have witnessed considerable public anger over apparently low tax bills paid by certain companies . As a result the OECD plan was drawn up to tackle this perceived tax avoidance by multinationals ( Base Erosion and Profit Shifting (“ BEPS ”)). Existing principles of international taxation were designed before the globalization of business and the digital economy . Policy makers are now recognizing these wider issues , and recognize that maintaining the status quo is not an option .
Tax is no longer something limited to business and tax authority relationships — it has become a significant strategic business issue , and there are also growing demands for tax information from many non-traditional sources .
The issue of tax transparency continues to be part of the global political and media agenda . It is too early to assess the impact of all the changes in the marketplace ; however it is highly likely that most multinationals will be affected . Identifying risks and opportunities that current developments bring is critical and requires regular monitoring and review of an organization ’ s position and options . As the strategic goals and operations of a business change over time , so should the tax strategies adopted to support them .
As part of this global tax [ r ] Evolution , there is a perception multinational businesses are not paying their fair share of taxes . Responsible tax ( e . g . reputational risk ) is now an important component of international tax matters . There are three components to this [ r ] Evolution : the administration of tax laws and treaties by jurisdictions ( we see a growing number of instances of potential double tax where more than one country is seeking to tax the same income ); unilateral tax law and treaty changes ( we see a growing list of countries that are enacting or proposing uncoordinated legislative changes to protect their tax base , which can lead to double tax situations ); and the OECD BEPS project .
A survey
The purpose of Deloitte ’ s “ Base Erosion and Profit Shifting ( BEPS ) & Responsible Tax survey ,” completed in March 2014 , was to gauge contacts ’ views regarding the increased media , political and activist group interest in “ responsible tax ” and BEPS , and the resulting impact on their organizations . Nearly 600 Deloitte contacts responded to the survey .