According to Bridging the divide, a report published by accountancy firm EY, 81% of companies consider that tax risks and controversy will become more important to their business in the next two years.
According to Bridging the divide, a report published by accountancy firm EY, 81% of companies consider that tax risks and controversy will become more important to their business in the next two years. The survey, which involved 830 tax and finance executives in 25 jurisdictions, was completed last January.
The report identifies transfer pricing as the main source of risk, with indirect taxes and issues related to permanent establishment named the second and third highest sources of risk. The report observes that these activities are under unprecedented scrutiny from the news media, national policymakers, activist groups and supranational organisations, noting that assertions of tax avoidance by one group often triggers reactions by the others.
The EY report states that 74% of the largest companies say they feel that tax administrators are now challenging existing structures, due to changes in the law or changes in their enforcement approach. Some countries have already taken steps to implement concepts related to BEPS.
Transparency
Separately, a PwC report, Tax transparency: what are the UK’s biggest listed companies reporting?, suggests that there has been a step change in the tax disclosures made by the UK’s largest listed companies. Almost half (49) of the FTSE 100 now disclose information on their overall approach to tax, a 50% increase on the 32 companies that explained their approach the previous year. Also, 22 FTSE 100 firms (17 the previous year) now provide some breakdown of taxes around the world, either by region or by country. Eight of these firms are extractives companies, which experience particular interest in where they pay tax, and four are banks, which will soon have to communicate detailed figures as part of the CRD IV transparency requirements.
Andrew Packman, tax partner at PwC, said: ‘Companies are starting to see the benefits of voluntary disclosure of all taxes. It is total taxes that governments are interested in to fund public spending, not corporation tax alone, so it makes sense to provide the full picture.’
According to Bridging the divide, a report published by accountancy firm EY, 81% of companies consider that tax risks and controversy will become more important to their business in the next two years.
According to Bridging the divide, a report published by accountancy firm EY, 81% of companies consider that tax risks and controversy will become more important to their business in the next two years. The survey, which involved 830 tax and finance executives in 25 jurisdictions, was completed last January.
The report identifies transfer pricing as the main source of risk, with indirect taxes and issues related to permanent establishment named the second and third highest sources of risk. The report observes that these activities are under unprecedented scrutiny from the news media, national policymakers, activist groups and supranational organisations, noting that assertions of tax avoidance by one group often triggers reactions by the others.
The EY report states that 74% of the largest companies say they feel that tax administrators are now challenging existing structures, due to changes in the law or changes in their enforcement approach. Some countries have already taken steps to implement concepts related to BEPS.
Transparency
Separately, a PwC report, Tax transparency: what are the UK’s biggest listed companies reporting?, suggests that there has been a step change in the tax disclosures made by the UK’s largest listed companies. Almost half (49) of the FTSE 100 now disclose information on their overall approach to tax, a 50% increase on the 32 companies that explained their approach the previous year. Also, 22 FTSE 100 firms (17 the previous year) now provide some breakdown of taxes around the world, either by region or by country. Eight of these firms are extractives companies, which experience particular interest in where they pay tax, and four are banks, which will soon have to communicate detailed figures as part of the CRD IV transparency requirements.
Andrew Packman, tax partner at PwC, said: ‘Companies are starting to see the benefits of voluntary disclosure of all taxes. It is total taxes that governments are interested in to fund public spending, not corporation tax alone, so it makes sense to provide the full picture.’
