Transparency vs. Exposure: the Cost of Full Monty
For five consecutive years, our global Taxand organization has surveyed CFOs and tax and finance directors across Europe, Asia and the Americas as part of its global survey to understand the current tax landscape across the world and how multinational companies are currently interacting with rapidly changing legislation and more focused tax authorities.
The most recent report found that nine in ten respondents (91 percent) feel exposure to the public of tax planning activities, through the media, has a detrimental impact on a company’s reputation — an increase from just over half of respondents five years ago (51 percent in 2011 and 77 percent in 2015). In addition, three-quarters of respondents (75 percent) said they were concerned about the potential exposure of tax planning information needed to meet the OECD’s base erosion and profit shifting (BEPS) initiative regulations on country-by-country reporting standards. Eighty-nine percent of respondents believe that among other concerns, the increasing global tax transparency will raise the cost of compliance.
Looking at the approach companies take to tax planning, 76 percent of CFOs and tax directors said tax is a top issue on their board’s agenda, with nearly a third of respondents (31 percent) stating that increasing tax scrutiny had made them change their corporate growth strategy in specific countries.
Eighty-one percent of respondents said they anticipate tax competition between countries will increase over the next five years, despite the global drive for tax harmonization. This is in line with the results of another poll of senior executives during a recent Taxand webcast, Global Trends Affecting Tax Leadership.
Disclaimer
As provided in Treasury Department Circular 230, this publication is not intended or written by Alvarez & Marsal Taxand, LLC, (or any Taxand member firm) to be used, and cannot be used, by a client or any other person or entity for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
The information contained herein is of a general nature and based on authorities that are subject to change. Readers are reminded that they should not consider this publication to be a recommendation to undertake any tax position, nor consider the information contained herein to be complete. Before any item or treatment is reported or excluded from reporting on tax returns, financial statements or any other document, for any reason, readers should thoroughly evaluate their specific facts and circumstances, and obtain the advice and assistance of qualified tax advisors. The information reported in this publication may not continue to apply to a reader's situation as a result of changing laws and associated authoritative literature, and readers are reminded to consult with their tax or other professional advisors before determining if any information contained herein remains applicable to their facts and circumstances.
About Alvarez & Marsal Taxand
Alvarez & Marsal Taxand, an affiliate of Alvarez & Marsal (A&M), a leading global professional services firm, is an independent tax group made up of experienced tax professionals dedicated to providing customized tax advice to clients and investors across a broad range of industries. Its professionals extend A&M's commitment to offering clients a choice in advisors who are free from audit-based conflicts of interest, and bring an unyielding commitment to delivering responsive client service. A&M Taxand has offices in major metropolitan markets throughout the U.S., and serves the U.K. from its base in London.
Alvarez & Marsal Taxand is a founder of Taxand, the world's largest independent tax organization, which provides high quality, integrated tax advice worldwide. Taxand professionals, including almost 400 partners and more than 2,000 advisors in 50 countries, grasp both the fine points of tax and the broader strategic implications, helping you mitigate risk, manage your tax burden and drive the performance of your business.
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