The impact of the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting action plan is still unclear, but tax executives are planning ahead for changes on the international tax front.
Earlier this month, the OECD unveiled its plan for combating tax evasion strategies by multinational corporations (see OECD Proposal Could Curb Tax Loopholes Favored by Google, Apple). According to a new poll by Deloitte of more than 1,100 business executives, the impact of the OECD BEPS plan on U.S. tax reform is unclear, with 33.5 percent of the respondents saying the BEPS package strongly affects and emphasizes the need for comprehensive business tax reform, while 25 percent said it hasn’t impacted the debate enough to make the case for tax reform.
Country-by-country reporting tops the list of priorities for the organizations surveyed, with 30.6 percent of the business executives polled saying they have prioritized the need to evaluate the steps necessary to comply with the OECD’s country-by-country reporting requirements. The top concern with country-by-country reporting is the cost of compliance, at 26.8 percent of the executives surveyed.
Compliance is the biggest concern for the executives polled, with 37.7 percent of the survey respondents citing the increase in their tax compliance burden as their main concern with the BEPS package. Other concerns include double taxation of income (for 17 percent of those polled) and an increased effective tax rate in income from cross-border transactions (14.9 percent).